British property prices make rebound from post-Olympic slump

PUBLISHED : Wednesday, 14 November, 2012, 12:00am
UPDATED : Wednesday, 14 November, 2012, 3:22am

British house prices rose for the first time in five months in October as the market rebounded from a post-Olympic slump, research consultancy Acadametrics said.

The average price of a home in England and Wales climbed 0.1 per cent from September to £225,954 (HK$2.78 million), Acadametrics and LSL Property Services said in a report on Thursday. From a year earlier, values rose 2.3 per cent.

Britain's uneven economic recovery has restrained the property market, as have tight lending conditions, which the Bank of England is trying to rectify with its Funding for Lending Scheme.

While a 24 per cent surge in transactions last month may just be partly a one-time rebound, there are also "tentative indications of a slight thaw in the mortgage market", Acadametrics said.

"Although the number of borrowers able to secure a mortgage remains far from healthy by historic standards, lenders are starting to pass along cheaper finance provided by the FLS," said Richard Sexton of LSL.

"Any future easing of borrowing conditions will be welcomed with open arms by prospective buyers."

Transactions rose to 65,675 in October from 53,125, which was the second lowest total for a September since 1995. But Acadametrics said this surge was probably a "one-off adjustment as opposed to a fundamental shift in demand resulting from an increase in mortgage availability".

Out of the 10 regions tracked by Acadametrics and LSL, five posted declines in the three months to October from the same period a year earlier and five increased. The groups combine initial transaction data from the Land Registry and results from other price measures for their index of values.

Knight Frank said this month that British home prices would fall two 2 per cent next year.