Latest News on House Prices

Welcome to the page on Anglesey house prices. Here you can keep up to date with what is happening to prices on Anglesey.

The latest views of the Bank of England on interest rates and inflation will be posted here at regular intervals. You will also read what some of the lending organisations have to say about the direction of real estate in general.

7 July 2006

Prices in the UK fell by 1.2% in June, with the average house price (seasonally adjusted) a staggering £176,509, according to the Halifax House Price Index. The report shows that in Wales the figure is £149,225.

Prices in Wales fell by 0.8%,which reflects the growing problem of affordability for buyers in Wales and specifically on Anglesey. So what are the factors behind this shift?

According to the Halifax, “substantial increases in utility bills and above inflation council tax rises are putting pressure on householders’ finances with the majority of these increases yet to be felt.” So the news ahead is not encouraging.

It also seems that the ratio of house prices to average earnings is at an historical high. Now if you throw in the recent rise in fixed loan deals and the likely rise in interest rates, house buyers are going to stay away.

On Anglesey the market appears to have been marked down and as a result there was a short spurt of activity in late June. So it seems, in an effort to keep the market moving, estate agents are "reducing" prices aggressively.

And yesterday the Monetary Policy Committee of the Bank of England kept interest rates unchanged at 4.5% for the 11th month in a row. It seems it’s only a matter of time until the bank base rate will rise.

30 June 2006

House price figures just released from the Nationwide for June show a subdued growth of 0.3%, and show that the average house price in the UK is now £165,800 ($300,000).

The trend has been for a slowing down in house price inflation and the Nationwide expects things to remain quiet over the next month or so, particularly due to the World Cup.

Is there an end to these increases, both in house prices?

"House prices could be settling back into a period of relatively modest increases, after spiking up in the latter months of 2005 and the beginning of 2006", said Howard Archer, economist at Global Insight.

He cautiously added that house prices could perk up in the near future from a combination of increased lending figures for May and anecdotal evidence from some estate agents.

And what about the level of debt? Is there any end in sight for the growth we have witnessed over recent months?

Apparently not, according to the Council for Mortgage Lenders (CML), which notes the new debt figure is due to 70% of the population now owning their own homes.

Mortgage Debt tops a trillion

Total mortgage debt in the UK has now gone over the one trillion mark, according to the Bank of England, with a further £9.3 bn borrowed for house buying in May. Gross mortgage lending rose to £28.7 bn in May according to the CML.

In general, lending does tend to be higher in May than in April due to the tendency of house buying to pick up in the Spring. And according to CML Director General Michael Coogan:

"The recent lending market has been consistently strong. Lending has hit record levels in six of the last eight months supported by the strength of the London market, interest in higher priced properties, and strong consumer confidence. We expect demand to moderate later this year, but it looks set to stay robust for the immediate future - although property viewings might be affected by World Cup fever."

Bank of England Inflation Overview

The latest quarterly inflation report from the Bank of England would suggest a further interest rate increase may be needed over the next two years to keep within the Government's 2% inflation target.

Addressing the House of Commons Treasury Select Committee, Mervyn King, the Bank of England Governor, noted that energy prices will cause a fluctuation in inflation from month to month.

He went on to say: "A degree of uncertainty has entered the economic landscape and that's brought in to focus by the recent turbulence in financial markets".

Commenting on the impact of the world economy on UK interest rates, he added: "After a period of strong growth in the world economy, a rebalancing of global demand is desirable but it's unlikely to be smooth".

From this we can say that it will be difficult to predict the exact direction of interest rates and inflation. Mr King was of the opinion that the picture had not changed much since May, so we may assume that an interest rate increase is still likely in the near future.

The Anglesey property market, like much of the rest of the country, has seen record surges over the last year and over a 10 year period. It would seem from what that the Bank of England is saying that property price growth is likely at best to be subdued for the forseeable future.


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