Property Prices Up

Experts were predicting today that some small encouraging signs in the property market could herald a more durable recovery.

On the day it was revealed that house prices rose in March for the first time since October – by 0.9%- comes news that householders have been paying off their mortgages at a record rate.

Mortgagees reduced their debt by £8bn between October and December of last year. This was the third consecutive quarter that repayments have outstripped equity withdrawals.

Much of it is because interest rates have plummeted – giving millions of people much cheaper mortgage repayments.

The big amounts that householders are choosing to pay back on their mortgagees reflects widespread uncertainty in the jobs market and abysmal rates offered to savers by banks.

Many people think it’s more prudent to reduce their mortgage commitment than to splash out on spending – or to save the monies from reduced mortgage costs in a bank account.

The news that house prices have had a slight bounce – as reported by the Nationwide building society – does not mean that the market has turned.

But it is good news coming on top of reports from the Royal Institute of Chartered Surveyors saying that there is a marked rise in interest from putative property buyers.

The total number of mortgages approved by lenders rose from 32,000 in January to 38,000 now. The average price of a house in the UK is £150,946.