Housing round up: House prices jump sharply for new build properties


Housing & mortgage round upConflicting house price news again this week; figures from the ONS show a small rise in general, but a sharp increase for new build properties.

Rents have fallen for a second month in a row, and mortgage fraud seems to be on the rise.

Read on to learn more.

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House prices show a small rise

New figures from the Office for National Statistic (ONS) show that house prices have risen by 0.3% over the past 12 months.

According to the ONS figures the average home in the UK is now worth £224,473; significantly higher than the averages recorded by the other two main house prices surveys published by the Halifax and Nationwide.

The official government figures for house prices have now been taken over from the Department for Communities and Local Government by the ONS who said: “In the 12 months to February 2012, average house prices increased in both England and Scotland by 0.4% and 1.1% respectively.”

They continued: “These increases were offset by decreases in Wales, where average prices decreased by 0.5%, and Northern Ireland, where average prices fell by 9.7%.

“The annual increase in average house prices in England was driven by increases in both London and the South East, where prices increased over the year by 1.7% and 1.2% respectively.”

But prices of new build properties rise significantly

The same ONS survey showed house prices for new build properties have risen by 7.7% on average over the past year.

Most surveys have shown flat or indeed falling house prices across the market as a whole but the ONS figures indicate that new build properties are an exception.

Housing experts believe that the rise in value of new build properties could be down to government incentive schemes such as the Stamp Duty holiday for first time buyers and the newly launched NewBuy scheme. Historically low interest rates are also likely to be a contributory factor.

In addition to the price rise the ONS confirmed that the number of new build properties sold had risen by “about 20%”.

The figures have led to concerns that people buying new build homes, who are often first time buyers, are buying at over inflated prices, which will benefit the developer but could lead to more cases of negative equity if prices fall in months and years to come.

Average rents fall again, but not by much

The average rent paid by private tenants fell again last month according to new figures from the lettings agency LSL.

LSL say that the average rent paid by private tenants fell by £2 per month, the equivalent of 0.3%, to £705.

Despite the small falls over the past couple of months rents are still up by 2.7% compared to this time last year.

Property experts believe that the drop is temporarily down to an increase of first time buyers due to the end of the government’s Stamp Duty holiday.

David Newnes of LSL said: “The rental market was still feeling the knock-on effect from the stamp duty deadline in March, with an increased number of tenants rushing to leave the sector in the first part of the year, easing tenant competition.”

He continued: “With the passing of the stamp duty deadline increasing the cost of moving, and banks’ funding conditions likely to limit high value mortgage lending to first-time buyers, would-be buyers will be more reliant than ever on rented accommodation.”

Mortgage fraud on the rise

New figures from Experian have shown that the number of fraudulent mortgage applications more than doubled in 2011 compared to 2010.

Experian found that in 2011 34 in every 10,000 mortgage applications were fraudulent compared to 15 per 10,000 in the previous year.

2011 was the 5th year when fraudulent applications rose, with most being down to applicants misrepresenting their personal information particularly with regard to credit history and employment status. Others simply made false claims about their financial position.

Responding to the figures, Nick Mothershaw of Experian said that the fraudulent applications tended to come from the “financial stressed segments of society”.

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