2007 ends with a 5.2% rise in the average house price

The UK’s biggest lender, the Halifax, reported house prices rose by 1.3% in December meaning the year finished with overall growth of 5.2%. What then does this mean for co-buyers looking at shared ownership solutions?

Over the last 12 months, the most recent data published by the Halifax through their “House Price Index”  shows the cost of the average house in the UK has now risen to £197,039. This is an increase of £11,759 since the start of 2007 and represents a rise of 5.2%, still considerably above the rate of inflation but is the lowest  rate since 1996.

This surprise rise followed three months of house price decline with a 1.3% drop being reported in November, 0.7% for October and 0.6% in September. The Halifax also noted that this was the only the second time in the past six years where house prices over the course of a year had not rise more than 8%.

Halifax’s Martin Ellis, as their chief economist said “Overall, the housing market continued to slow in the final quarter of 2007 with prices slightly lower than in the preceding quarter. Higher mortgage repayments in response to the series of five interest rate increases between August 2006 and July 2007 and falling real earnings have put pressure on households' income, resulting in a slowdown in both house price growth and activity in recent months.

Sound economic fundamentals and lower interest rates will support house prices in 2008. The UK economy is expected to deliver its 65th successive quarter of GDP growth during the year, extending the longest running period of unbroken growth on record.  The MPC is likely to follow up last month's cut by reducing the Bank Rate at least twice in 2008.  House prices are predicted to be flat during 2008."

What though does this mean for the first time buyer of those considering making a move on the property ladder?

Though a potential slow down or even a decrease in house prices has been widely reported, it is highly unlikely this would result in the price of the average house across many parts of the country reaching an affordable level for those on low / average incomes. With an average salary still around £25k, even as a couple, in many areas of the country house prices are still out of reach.

Co-Buying or shared ownership of a property can present a number of benefits. You can increase your buying power by joining with other co-buyers. By entering a shared ownership agreement you can reduce significantly you property (or anything else for the matter) purchase costs. And by co-buying a property the increased flexibility that a shared ownership solution can bring allows you to get what you want, where you want and when you want.
Have a look through our Co-Buyers guide for more information, and make sure you register now so you can meet other like minded people interested in a shared ownership start to a property future.

Posted by Mark on 08/01/2008

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