Housing market entering 'buoyant' phase, says survey

The housing market is enjoying a "buoyant phase" after stagnating for much of this year, a property database company said today.

The price of the average home rose by 0.4 per cent in September, the fastest pace for six months, according to Hometrack. It found that sellers were achieving an increasingly large percentage of their asking price while the number of sales had risen.

"The housing market is definitely returning to a buoyant phase," said John Wriglesworth, Hometrack's housing economist. "The many doom-mongers who have been predicting a crash over the past two years are looking rather foolish. Clearly houses are still affordable for many homebuyers".

He said that with interest rates at a 50-year low, lenders have been showing signs of relaxing their lending criteria with some offering buyers to chance to buy eight times their salary.

Buyers who take out medium-term loans will continue to find their mortgage payments remain low compared with their incomes. "Continuing low unemployment and strongly positive demographic factors, particularly a fast growing population with an inherent desire to become homeowners, all point to a sustained and healthy housing market," Mr Wriglesworth said.

The survey showed a continuing divide between northern and southern regions with price increases particularly strong in Wales and the North West of England.

Areas leading the rise were Shropshire with 1.8 per cent per cent, Merseyside (1.4 per cent), Mid Wales (1.4 per cent), North Wales (1.3 per cent) and Cumbria (1.2 per cent).

Only four areas recorded house price falls - all southern regions - Surrey (0.4 per cent), North-west London (0.4 per cent) Berkshire (0.3 per cent), and Suffolk (0.1 per cent).

Generally the main house price rises are occurring in the more affordable regions of the country.

The 10 regions with the highest house price rises, have an average house price of £102,400 where as the 10 regions with the lowest house price rises have an average house price of £213,760.

The number of sales agreed again rose in the September survey (up 2 per cent).

Sales prices achieved as a percentage of asking prices at 94.6 per cent, has risen for the second month running (from a low of 94.3 per cent in June this year) having been falling from a peak at the beginning of 2002.

"This suggests the market is tightening, buyers are less able to command big discounts," Mr Wriglesworth added.