UK House Prices: Everything's Coming Up Roses

Well, the news on UK house prices is still positive, that is to say positive for sellers if not for buyers. Last week Nationwide told us that UK house prices rose 1.2% in January, the biggest rise since August, and now, the Centre for Economics and Business Research -- one of the few bodies to have predicted that prices would rise in 2009 -- has forecast a 10% increase this year.

On top of that, mortgage approvals for house purchases keep rising and this is great despite the fact that remortgaging is at its lowest level for years.

The economy is out of recession, hooray, and even the labour market decline has started to peeter our and show signs of turning round.

It is all upbeat except for Hometrack: the housing market analytical body says that prices only rose 0.1% in January and warned that the fact the housing market is being driven by buyers with little if any mortgage requirements combined with the low volume of transactions could be distorting the picture of the wider market.

There are a limited number of people who can buy properties in the current climate; only people who meet the following criteria need apply:

Those who are financially secure and/or in secure employment

And/Or

Who either have the cash to buy outright, or a deposit of at least 10% of property value so that they can get a mortgage, or a family member willing to give or lend said cash

And/Or

Those who can find a bank willing to lend to them even with a deposit at a rate they can afford

And/Or

Those who can find a buyer for their property and sell with enough left over to purchase a new home either outright or with a mortgage

And

Those who can find a suitable home in their area of choice at the right price for them and a fair price for the market

This is a very tough set of criteria, one that a limited number of people meet. Prices are rising now because coincidentally the number of houses available is even more limited. If supply increases before these criteria loosen then prices will fall again, and hard.

For my full predictions read this article.

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