House prices are offering little relief to homeowners that are looking for their property values to turn and start building their equity.  In most areas other than London house prices have declined leaving homeowners struggling to remortgage without adequate equity or plunging them into negative equity as their property value fell below their mortgage debt level.  The average house price for the UK has benefitted from the increases in London house prices.

According to recent data from LSL Property Services the average house price has shown its first annual increase in 13 months.  House prices in May rose 0.5% compared to April data and 1.9% on an annual basis.  The LSL Property Services researcher, Peter Williams, attributed the increase in the annual levels more to the decline in levels last year in May and June rather than substantial increases this year.

The research revealed that the number of house sales increased to 60,000 in May which is an increase over the 45,000 recorded in April. 

In a report from the Council of Mortgage Lenders there was a decline in the number of first time buyers by 48% in April which was attributed to the expected decline resulting from the expiration of the stamp duty holiday.

The CML said, “The average loan amount fell from £117,000 in March to £98,000 in April, and first-time buyers typically borrowed 3.12 times their income, down from 3.34 in March. These changes are almost wholly because of the trend in April towards cheaper properties rather than a real improvement in affordability for first-time buyers.”