UK house sales hit two-and-a-half year high, Rics survey shows – The Guardian
Property transactions in the UK reached their highest level in two and a half years as house buyers took advantage of record low interest rates, according to a survey of estate agents.
The monthly market survey from the Royal Institution of Chartered Surveyors (Rics) found that the increased availability of cheaper home loans as a result of the Bank of England‘s funding for lending scheme (FLS) had led to a pickup in transactions.
Surveyors sold an average of 16.8 homes in February – up from 15.9 in January but still more than 50% down on the levels hit in the early 2000s.
Peter Bolton King, Rics’ global residential director, said: “It’s encouraging to see that the housing market now appears to be picking up across most parts of the UK despite ongoing concerns about the health of the economy. This may, in part, be down to the growing availability of mortgage finance through schemes such as funding for lending. However, even with activity running at its best level since the middle of 2010, it is still well down on its pre-crisis norm.”
Threadneedle Street, which launched the FLS last August in an attempt to increase the flow of credit to households and businesses, released data showing how mortgage rates had come down in the subsequent six months.
The monthly interest rate charged on a two-year fixed rate mortgage with a 75% loan to value (LTV) fell to a record low of 2.87% in February from 3.06% in January, 3.35% in December and 3.69% in August 2012. For a five-year 75% LTV fixed-rate mortgage, the monthly interest rate hit a record low of 3.58% in February from 3.65% in January, 3.89% in December and 4.11% in August.
Interest rates for two-year fixed rate mortgages with a 90% LTV dipped to 4.58% in February from 4.67% in January, 5.33% in December and 5.93% last August.
Although lending to businesses has not improved as a result of the FLS, mortgage finance has become easier to obtain, leading to a gradual increase in transactions.
Rics said surveyors were cautiously optimistic the recent trend would continue, with slightly more surveyors expecting activity to continue to rise than expecting transactions to decline.
Despite increased sales, house prices have continued to fall. The gap between those surveyors reporting a fall in prices and those recording an increase widened from four to six percentage points in February. Property prices are rising most strongly in London and falling most heavily in Scotland and Northern Ireland.