A recent survey of homes for sale have shown that the house price increases can vary dramatically based on the type and location of the property, and this means that there is still a house price gap that is continuing to grow.

Whilst homeowners in some areas of the UK are sporting beaming smiles having seen their property value shoot up considerably after a turbulent period, homeowners in other parts of the country have seen the value of their homes continue to tumble.

For example, in London house price growth is said to be has high as 7.1 percent. However, in Scotland the average house price is said to have fallen by around 12.2 percent.

Figures have suggested that the house price increases that have been reported over the past few months have been largely centred around London and the South East, which means that whilst the year may end on a high for some homeowners this will certainly not be the case across the country.

Nigel Lewis from property website FindAProperty said: “This year’s ups and downs mask considerable variations between the winners and losers. Different regions, cities and different types of property performed extremely variably.” He added that some parts of the city had been adversely affected too, adding: “The oversupply of new-build property around the Cutty Sark and Woolwich Arsenal has partly been to blame for the dip in prices.”

House price gains are not good news for all is a post from: Glitec Loans

The figures were based on a RICS poll that involved surveying member estate agents. RICS officials stated that around 35 percent more members reported that there had been an increase in November rather than a fall, and that this was the highest since November of 2006.

RICS has also stated that there continues to be a higher demand for property than supply, and if this trend should continue then it is possible that house price growth will continue into the New Year.

A spokesperson for RICS, Ian Perry, stated that the state of the economy would suggest that the property market should not be doing as well as it appears to be doing, but pointed out that the survey had indicated that prices were rising for the fourth month in a row.

Officials from RICS did add that there had been a slight increase in the number of properties that were coming back onto the market for sale, but said that demand was still outstripping supply and that the increased supply was not sufficient enough to dampen house prices increases.

New instructions to sell property are said to have increased for the sixth month in a row to a two and a half year high and 28 percent more surveyors reported an increase rather than a fall in enquiries.

Ian Perry from RICS said: ‘Despite modest increases in the number of properties coming on to the market, it is clear that this is not significant enough to keep pace with the levels of demand. Buyer enquiries are continuing to grow and with the pace of job losses now easing, the risk is that the New Year could see a further wave of interest in the market.’

Property prices still strong according to RICS is a post from: Glitec Loans

The warning came as the building society posted details of its profits, which have plunged by around 63 percent. Pre-tax profits for the building society were reported to be £117 million for the six months to September, and this compared to £322 million in the same period last year, reflecting a 63 percent drop.

According to reports the rock bottom base rate has resulted in a lower return on borrowing, which has affected the profits of the lender. In addition to this significant falls in commercial property values have also had a detrimental effect on profits, said the building society.

Graham Beale from the Nationwide said that 2010 was likely to bring continued challenges, and he expressed concern over the recovery of the property market in the UK.

Beale predicted that the current base interest rate, which has been at an all time low of just 0.5 percent for eight months, would remain at this level until at least the final quarter of next year.

He added that the recovery of the economy was likely to be slow and drawn out. Commenting on the recovery of the property market he said that house price increases seen recently had been the result of lack of supply, but that property values would be driven down next year due to rising unemployment and other factors.

He stated: ‘Economic recovery is forecast to be slow and we expect interest rates to remain at their current level until at least the fourth quarter of 2010. We are also cautious on future prospects for the housing market. The growth in house prices over recent months appears to be driven by lack of supply, and growth in unemployment throughout 2010 will inevitably exert downward pressure on house prices.’

Nationwide predicts downward spiral for house prices is a post from: Glitec Loans

The last time that property prices rose year on year was March 2008, so the recent figures amount to encouraging news in the property market. However, whilst property prices are now higher than the same period last year they are still over 13 percent lower than they were at their peak in 2007, just before the global credit crunch took a hold in the UK.

One industry official said: ‘A moderation in the rate of house price inflation was to be expected, as the very strong monthly increases seen over the summer months were unlikely to be sustainable over the long run. Slower house price inflation is also consistent with developments in housing market activity, as industry figures have shown that the pick-up in mortgage approvals for house purchases has lost some momentum in recent months.’

He added: ‘Although too early to tell for sure, it may also reflect a more natural level of stock available for sale coming to the market, alleviating some of the extreme shortages of property on the market seen during most of this year.’ Another industry expert said: ‘The stand-out symptom of the current property market is that stock levels are, in many cases, half of what they were in May. There is no sign on the horizon of more natural stock levels. As any buyer will know, there is very little choice out there at present. The ongoing rise in prices has been caused exclusively by the shortage of stock and growing demand, and the absence of new housing. With house prices higher than a year ago, now could be a window for sellers to achieve a price for their property that would have been unthinkable in the spring. Rising unemployment and, at some point, higher interest rates, could see a further stabilisation, or even reverse, in prices.’

Property prices see annual rise is a post from: Glitec Loans

It appears that the more pessimistic economists and experts may have been correct in their predictions, as according to recent report there was a slight drop in property values in August. The figures were released by the Land Registry, which stated that there was a drop of around 0.1 percent between July and August. Whilst this was only a very slight drop it was nevertheless a drop, which will disappoint those that thought property values would keep on rising.

The figures from the Land Registry suggest that the house price revival may not be one that is going to be sustained, although officials from the Registry said: “The annual rate of decline is continuing to slow… from a low of approximately -16% experienced in February.”

HM Revenue and Customs has also recently reported that there was also a slight drop in property sales levels in August. In addition to this the number of mortgage approvals in August also fell according to figures from the British Bankers Association.

One official said that property increases seen over reason months were due to a rise in demand, stating: “A surge in demand and a shortage of quality property on the market is the principal reason prices are increasing. The big question now is how much pent-up demand from frustrated potential buyers remains in the system to maintain the momentum.”

Another official said: “The property market is surprisingly buoyant at present and sellers are achieving some attractive prices. Just how long this will last, though, is by no means certain.”

Slight drop in house prices in UK is a post from: Glitec Loans

Many industry officials, homeowners, and industry groups have been encouraged by the property price increases over the past few months, but there are also many industry experts that have said that this house price revival is only a temporary one that simply cannot be sustained.

According to the Nationwide measure property prices have increased by over 8 percent since February, but one property expert has described the price increase as ‘irrational’ and has stated that towards the end of the year property prices could start to fall again. James Thomas, head of the residential department at Jones Lang LaSalle is one of a number of industry experts who think that the current revival in property prices cannot be sustained.

He stated: ‘The unforeseen and seemingly irrational pick-up in prices has altered the outlook for UK house prices but it is likely that this recovery will prove temporary. The economic fundamentals that have supported the upturn, most notably the constrained supply of housing for sale, will be eroded as unemployment hits a peak and mortgage lending remains weak.’

He added: ‘While the recent improvement in the market is encouraging, it is impossible to ignore the short-term risks posed to the UK residential sector by rising unemployment and poor credit availability. We anticipate the current market revival to be unsustainable and predict a further contraction in prices during 2010 by -7%.’

It also seems that banks are treating the current revival with caution, as they are still being very careful with regards to mortgage lending. Despite the increases in property values over the past few months most lenders are still looking for high deposit levels from potential borrowers and are still charging high rates of interest despite the fact that the base rate is still at its all time low of just 0.5 percent. This has resulted in an under supply of mortgages, which could also put an end to the revival.

One industry expert said: ‘Whilst some commentators believe that prices have further to fall, the increase in prices over the last four months tentatively suggests that the market has bottomed out and that we are slowly climbing out of the trough. Whilst indications are that the market is ‘bottoming out’, the price gains achieved in completed transactions, as reflected in FTHPI, are very small and the potential for further reductions remains, not least because of the continuing under-supply of mortgages.’

He added: ‘Going forward, this could comprise a serious continuing downward pressure on the market. Given that interest rates will almost certainly rise in late 2010, it is clear that we are some distance from what might be seen as a stable and sustainable recovery. In that regard, the progress we report in the England and Wales housing markets has to be viewed with continuing caution.’

Can house price revival be sustained? is a post from: Glitec Loans

A survey was carried out by the Halifax recently, and the results showed that the gap between the price of rural homes and urban homes had widened by around 5 percent, and that homes in the country were now worth around 21 percent more than their urban counterparts.

Officials have said that homes in both rural and urban areas have experienced price falls during the slump, but that homes in rural areas have seen smaller price falls than homes in urban areas.

The most expensive rural area in the UK has been identified as South Oxfordshire. The average property price in this area is over £307,000, which is said to be over 50 percent more than the national average in rural areas.

One economist from the Halifax stated: ‘Homes in rural areas continue to command a marked premium over urban locations. This partly reflects the quality of life benefits that many associate with living in the in the countryside. Higher prices, together with generally lower earnings, mean that housing in rural areas remains significantly less affordable than in urban areas.’

The figures have also backed up reports that claim areas such as South Oxfordshire are becoming areas where only middle classes and upper classes can consider living, with lower income households unable to afford to move to rural areas.

Copeland in Cumbria was named as the most affordable rural area in the UK, but officials said that whilst it is an attractive area the Sellafield nuclear plant may be affecting prices in the area.

Country homes holding prices better than town houses is a post from: Glitec Loans

Many first time buyers – the ones lucky enough to be able to get a mortgage in the current climate – decide to look at new build properties, as in some cases building firms who are desperate to sell their homes in the current climate offer a range of incentives such as covering legal fees and other costs.

However, considering that for the average new build two bedroom house buyers would still be looking at paying an average £145,000 based on area, the cost can still be very high.

Worse still a recent report has shown that the new build properties in the UK have amongst the smallest rooms in the whole of Europe, suggesting that not only are buyers having to shell out a fortune for these new properties but that they are paying all this money for what has been described as nothing more than a ‘rabbit hutch’.

Recent research into new build properties in the UK have shown that these properties are getting smaller and smaller in the UK, and the ones built over the past few years have rooms that are amongst the smallest in the whole of Europe. This often means that those moving into the properties do not have the room to relax properly, entertain, socialise, and in some cases for their kids to play safely.

Whilst the average household size in the UK has been falling over the decades the Commission for Architecture and the Built Environment has said that this has no bearing on the tiny size of rooms in today’s new build properties, and that many properties simply were not suitable for everyday living.

Kitchens are often too small to move around in properly never mind have a table in them to dine at, living areas having little room for anything other than the basics, and some bedrooms are not even big enough to actually get a bed into.

A survey was carried out amongst homeowners who had purchased new build properties between 2003 and 2006. Out of the 2249 people that were polled around 44 percent said that there was not enough space for children to play safely whilst cooking was going on in the kitchen.

Close to 50 percent of those polled said that the properties were not large enough to fit their furniture into. Over one third said that the kitchens were not large enough to house kitchen appliances.

However, it is not just the cramped conditions that some officials are worried about. Some have said that these conditions could result in an adverse impact on health, well being, and family interaction. For instance, it is often recommended that families interact by all sitting down and dining together at the table rather than eating on laps whilst watching television, but in newer properties there is not enough room to do this.

Also, some children that cannot have their friends inside the house due to limited space will often end up going outside with them without any supervision.

A recent report stated: ‘The findings raise the question of whether many new homes are fit for purpose, and whether they are built to the standards required to meet the needs of the people living in them. To build housing that is tolerated only during a property-based economic boom is to build housing that does not stand the test of time.’

Are Brits paying out a fortune for properties that are too small to live in? is a post from: Glitec Loans

However, despite the encouraging figures officials from the lender have said that activity in the property market is still only at around half the level that it was in 2007 before the onset of the global credit crunch.

Officials from Halifax said that there was an increase of 0.8 percent in property values in August, and this brought the average property price up to £160,973.

This reflects a drop of just over 10 percent year on year on the Halifax House Price Index. It is thought that property prices are now roughly on par with the level that they were at in August 2004. House prices are now said to be down by nearly 20 percent compared to their peak in 2007 according to the lender.

As a result of a number of reports that have indicated that property prices are on their way up some industry officials have concluded that the property market is on its way to recovery.

However, many other industry experts have said that whilst there may be signs of green shoots the markets are still very volatile, and there is nothing to say that any recovery will actually be sustainable in the long term.

One leading economist stated: ‘Given ongoing tight credit conditions, still relatively poor economic fundamentals and the fact that affordability ratios are moving back up now, we suspect that house prices are highly likely to suffer relapses over the coming months. Much will clearly depend on whether or the economy can sustain a probable return to growth in the third quarter, how much further unemployment rises, how quickly and to what extent credit conditions ease, and how many properties come on to the market over the coming months.’

House prices increase between April and August is a post from: Glitec Loans

Officials have said that the property slump seems to be experiencing some degree of recovery, but added that caution was still necessary.

Officials from the Royal Institute of Chartered Surveyors had predicted that house prices would be 10-15 percent down on last year but have now said: “It now looks likely that the average house price in the fourth quarter of 2009 will be slightly higher than in the fourth quarter of 2008.”

Data has shown that over the past eighteen months around 20 percent has been wiped off average property values in the UK, but it now seems that property prices are starting to recover following the released of data from major mortgage lenders such as Halifax and Nationwide.

However, some officials have said that this recovery could be hampered if the Bank of England decides to increase its base interest rate over the coming months from its current level of 0.5 percent, which is the lowest it has ever been. It is thought that this could have a serious knock on effect on the UK’s banks.

One official said: “The elephant in the room is the huge contingent losses sitting on UK bank’s balance sheets, which are directly linked to the UK mortgage market. The losses incurred by UK banks so far have been largely due to the performance of the US market; but the next wave of write-downs will be made in the UK.”

Some banks have also expressed concern over the sustainability of any recovery in the property market, even though there has been some positive reports over the past month or so. The report from RICS stated that “there is still a danger of prices slipping back again in 2010.”

It also stated: “It is not clear that house prices have reached a bottom. In the current market, limited supply is at least as important as improving demand as a determining influence on house prices.”

House prices at the end of 2009 could be higher than the end of 2008 is a post from: Glitec Loans