Signs of Growth Good News For Home Buyers

The U.K. property market is beginning to show some signs of activity again after a couple of years of relative inactivity. February in 2013 saw slight average house prices increases, of 0.2 percent according to Nationwide Building Society or 0.5 percent according to Halifax. Halifax’s figures for the first quarter show increases of 1.9 percent.

The U.K. property market is beginning to show some signs of activity again after a couple of years of relative inactivity. February in 2013 saw slight average house prices increases, of 0.2 percent according to Nationwide Building Society or 0.5 percent according to Halifax. Halifax’s figures for the first quarter show increases of 1.9 percent.

This continues the promising trend over the previous few months for slight growth and puts the average house price at around £1,000 ($1,524) more than a year ago. Property prices in 2013 look set to maintain this steady growth throughout the year.

However, any increases should not send alarm bells ringing for renters and prospective buyers. On the contrary, there are some good reasons why the market is picking up and these can actually work in the favour of those looking for their first home.

The good news is that credit is gradually becoming more widely available to prospective buyers. This is in part due to initiatives such as the Funding for Lending Scheme (FLS), which commenced in August 2012 as a way to boost lending by allowing participating banks and building societies to borrow at more favourable rates.

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Another widely-publicised scheme, The Help to Buy scheme, offers consumers equity loans of up to 20 percent of the property value of new builds up to £600,000, helping buyers with five percent deposits or more to buy their first home. This follows and extends the NewBuy scheme that was launched in March 2012.

On the back of these initiatives, many banks and other lenders are targeting first-time buyers with interest cuts and increased availability of loans. A recent report from the Bank of England confirms that rates are set to drop further in the face of growing competition and demand. Keen to grab buyers, lenders are also offering a variety of sweeteners alongside rate reductions.

Halifax, for example, offers customers a £500 moving cost bonus, while with Lloyds TSB both the product fee and mortgage fee may be waived and £500 cashback paid on completion. Santander also offers £250 cashback together with free valuation. Moving house often requires a good amount of upfront expense, and the various rewards and offers are designed to make first-time buying a more attractive and realistic option for many current renters.

While most house prices should not be shooting up any time soon, the outlook is for slight but steady growth throughout 2013 and beyond. Together with the various incentives offered by lenders, and as long as they can raise the required five percent deposit, this is all good news for first-time buyers. 

Zoopla property news author Ewan Robertson is based in London and has extensive knowledge of both UK and international markets. Here he sees light at the end of the tunnel for Britain’s home buyers.