Annual house price growth in February held at 5.4% for the second month in a row, indicating increased stability, according to a new study.
Assetz House Price Watch, which provides a summary of the five major UK house price indices, says this could be the end of the property slowdown, although growth has reduced by 5.1% compared to a year ago.
The monthly average UK house price rose by 0.7% in February, the first positive monthly increase since October 2007. This could mean a return to strength in the residential market with the downturn witnessed in recent months part of a stabilisation process and not a market crash.
The latest figures released by the Council of Mortgage Lenders reveal that buy-to-let landlords undeterred by scare stories and taking advantage of improved negotiating power have stepped in to replace retreating first-time buyers and support the market.
Buy-to-let landlords are proving a better credit risk than the average homeowner and lenders have relaxed their criteria, with required rental income dropping from 125% to 120%. It appears likely that many buy-to-let lenders will even permit experienced landlords to borrow on the basis of just 100% cover going forwards once long-term rental growth returns.
The average house price in February, taken from the average price provided by all five major indices, was £213,430, up from £211,472 in January. This shows an increase of £1,958 and an increase of £10,519 since February 2007 when the average price was £202,911.
Stuart Law, chief executive of Assetz, believes we will see continued stabilisation and even an upturn in house price growth over the coming months, with annual growth likely to become constant at about 5% for the year.