Signs that the North East housing market has turned the corner are coming from two reports published today.
The latest RICS (Royal Institution of Chartered Surveyors) Residential Market Survey has shown that the amount of potential buyers looking to enter the market grew at the fastest rate since August 1999, with 78% more chartered surveyors in the region reported increases in demand.
The North East, which RICS said had “suffered more than most” since the market crash, experienced the biggest increase in the country in buyer activity in July, the figures show.
In addition, figures from the Council of Mortgage Lenders (CML) showed that the number of buyers climbing on to the property ladder for the first time is at its highest level since the financial crash in 2007.
There were 68,200 first-home purchases in the second quarter of the year, with the 25,300 loans made during June, representing a 30% jump on the same month a year earlier.
The number of homes sold in the region also increased last month, with 47% more surveyors reporting a rise rather than fall in newly agreed sales, compared with 32% back in June.
Prices rose in the country for the fourth consecutive month and grew at their fastest rate since the market peak of November 2006.
Edward Seymour of Edwin Thompson Estate Agents in Berwick, Northumberland, said: “The market continues to improve with more confidence being shown across the board. Prices have yet to really reflect this with purchasers driving hard bargains, and vendors who have been waiting a long time to sell willing to negotiate.”
Lenders, estate agents and property websites have been reporting big uplifts in activity this year following the launch of various Government schemes to unblock the housing market.
More first-time buyers have been seen entering the market and sellers also appear to be more confident about sticking close to their asking prices amid improved mortgage availability.
But fears have been raised that the initiatives must not lead to a property bubble. Particular concerns have been raised about a Government scheme called Help to Buy, which will underwrite ï¿½130bn of low-deposit mortgage lending with state guarantees from next year.
A study released by Halifax last month found that the typical house price paid by a first-time buyer is 4.26 times their annual earnings, well above an average of 3.23 over the last 30 years. Across the wider mortgage market, the CML said recent falls in interest rates had contributed to a record take-up of fixed rate deals in June. Such products accounted for 86% of all mortgages, the highest level of fixed rate mortgage uptake at any point for at least 20 years.
The latest figures provide more evidence that schemes such as Help to Buy and Funding for Lending are boosting conditions in the housing market.
Interest rates continued to show a downward movement with fixed rates falling to 3.40% on average, well below the 4.25% recent peak last August.