House sales on the up but prices not yet following

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Predictions that UK house prices will climb back to pre-2007 peak levels next year have been dismissed as pie in the sky for Spalding by local property experts.

But all the people we interviewed said that the homes market locally stabilised last year and that sales are continuing to pick up.

The average house price on the other hand remains at around the same level as last January, about £155,000 (from £100,000 for a two-bed semi and from £120,000 for a three-bed semi) with no sign of a sudden explosion, according to Jamie Hiller, AP Sales Spalding branch manager.

He said: “From 2010 when the number of sales plummeted, sales levels are bouncing back, but prices aren’t following them as it’s still tricky to get finance. I can’t see that situation changing dramatically this year.”

Jamie reported a continuing strong demand from investors for buy-to-let properties because prices remain low compared with other parts of the UK, but added that local first-time buyers are starting to come through too.

Housebuilder Ian Canham of Broadgate Homes said: “This week’s predictions of a 0.8 percent UK-wide price rise this year and 1.9 percent rise to pre-2007 levels in 2014 are a little adventurous for this area.

“Some mortgage lenders are relaxing their requirements so that it’s now possible to borrow to three and a half times your joint salary.

“Interest rates are low and prices are reasonable, so we’re finding local first-time buyers are buying our houses and I think a little price rise is definitely likely this year, and that’s healthy and necessary, as long as it stays little and rises very gently.

“No-one wants astronomic rises putting houses out of the reach of first time buyers.”

Russell Gregory of Munton and Russell estate agents said: “Activity in the market locally has been increasing since September/October last year but we’re a long, long way short of returning to 2007 price levels .

“To put it in perspective, nationally only one third of the number of houses sold in 2007 were sold last year, and while mortgage availability is improving, the number of mortgages made available each month now is also only about a third of 2007 levels.

“Also the figures quoted in some of the predictions made this week - showing average house prices now at more than £200,000 already - include London and the south east which distorts them.

“Take those figures out and what we need to do is keep our feet on the ground. What we need is stability.”