Mortgages – Shock Rise in House Prices in January

Amidst all the doom and gloom surrounding the housing market and mortgages, it is important not to overlook the fact the house prices went up by 1.9% in January. More people are expected to look for mortgages with the market beginning to recover.

According to a report on This is Money, it came as somewhat of a surprise that house prices increased by 1.9% in January which effectively meant that the average house price increased by some £3,000. The availability of mortgages has obviously suffered in light of the credit crunch but it is hoped that signs of recovery in the housing market will encourage more people to seek out mortgages and make property purchases to help kick-start the stagnating market into action. The housing market is obviously driven by the availability of mortgages and whilst the majority of mainstream providers are becoming more and more reticent to offer mortgages, many people are finding that there are a number of specialist providers of mortgage and remortgage deals that are just right when it comes to helping them get a foot on the property ladder. The news that property prices may be on the increase will certainly come as a welcome relief to homeowners and is certainly going to be beneficial in increasing the availability of mortgages.

Mortgages – Taking Things Slowly

The rise in house prices in January is the first time there has been any increase since February 2008 but, speaking to This is Money, mortgages expert, Martin Ellis, warns against reading too much into the increase and states, “Historically, house prices have not moved in the same direction month after month even during a pronounced downturn. For example, prices fell for seven successive months in 1989 but subsequently increased in three of the first ten months in 1990 even though the overall trend in prices was downwards. There are some very early signs that market activity may be stabilising, albeit at quite a low level.” As such, it is important to be aware that the effects on mortgages that this has may be minimal at first but it is certainly encouraging at least that house prices are showing some sign of stabilising.

Mortgages – First Time Home Buyers Begin to Return

According to the report on This is Money, first time home buyers are beginning a tentative return to the housing market as mortgages begin to become more readily available. The availability of mortgages is crucial to sustaining the housing market and, speaking to This is Money, housing expert, Peter Bolton-King, states, “During the boom years we saw the number of First-time buyers as a proportion of buyers rise as high as 37%, and I believe that an average of 25% is indicative of a healthy and confident market. While the figure of 22.5% is definitely not a sign that the housing sector is out of the woods yet, it does suggest that those infamous green shoots of recovery may not be as far off as first thought.”

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