While it may not be signaling a rebound from the recession there is some good news for the housing market from August figures.  According to Acadametrics Ltd. and LSL Property Services Plc. (LSL) the average house price in England and Wales increased by 0.1% from July to August.  This increase brought the average cost of a home to £226,243.  This is an increase of 2.6% when compared to the same month last year.

The boost is thought to be from home buyers that were sidetracked earlier in the summer by the Jubilee celebration and the bad weather.  Those that had delayed simply came out to finally shop and purchase property. 

Richard Sexton, LSL’s director of e.surv business, said, “Rather than signaling a radical shift in the housing market, the improvement reflects a mini-resurgence following more sluggish buyer activity earlier in the summer, affected by a combination of the Jubilee bank holiday and historically heavy rainfall.  In reality, obtaining a big-enough mortgage remains a hurdle for thousands of first-time buyers.”

There is an expectation that house sales will continue to slowly increase due to the latest government programme launched to keep loans flowing to borrowers at cheap interest levels.  The Funding for Lending programme allowed lenders to borrow from the government to fund their loans versus seeking funding from the global lending market.  This allowed lenders to keep funds readily available and at lower interest rates that would help both homeowners have access to more attractive remortgages and also buyers looking for an affordable mortgage.

The programme has brought historically low interest rates in mortgage lending to borrowers with some at levels below 3%.  While this level was not readily available to the average borrower due to loan to value (LTV) requirements of 30% to 40% there are currently very good offers at low interest rates with higher LTV levels.