The latest house price index from the Halifax puts the average price at £160,973, up 0.8%. It said low interest rates and cheap prices are attracting buyers back into the market.

‘Overall, house prices nationally are very similar to the level at the end of last year.

Demand for housing has increased since the start of the year due to better affordability and low interest rates,’ said Martin Ellis, Halifax housing economist.

‘This, together with low levels of property available for sale, has boosted house prices over the last few months,’ he added.

The figures will boost confidence in the real estate market as all the major indices are now reporting increasing demand for properties.

Halifax’s analysis shows the proportion of disposable income households devote to mortgage repayments has fallen significantly over the past 21 months, and is below the long-term average of 35% over the past 25 years.

Those who are able to raise mortgages are typically spending 29% of their take-home pay on servicing their debt, well below the peak of 48% in the autumn of 2007 when prices were at their highest.

n recent weeks inter-bank lending rates have started to fall and some lenders have passed on these cuts through more competitive fixed and discount rate mortgages.

However, they are still demanding large deposits from buyers and taking few chances on what they perceive to be riskier borrowers.

Last month Halifax said it expected prices to end the year 7% down, halving its original forecast that the residential market would fall by 15% in 2009.

Nationwide and the Royal Institution of Chartered Surveyors have also revised their year forecast and are more optimistic about the year end.

Source: www.propertywire.com

Residential rental prices in the UK are stabilising as the number of accidental landlords declines due to an improvement in the property market, it is claimed.

The latest figures from the Royal Institution of Chartered Surveyors show that 6% more estate agents reported a rise in new instructions from landlords in the three months to the end of July, compared with 21% in the previous three month period.

The number of rental properties coming on to the market is falling quickly, leading to less choice and potentially higher rents for those priced off the housing ladder, it says in its report.

The main reason for the fall in new landlords is the disappearance over summer of so-called accidental landlords who decided to rent rather than sell their properties in a falling market.

Their numbers increased at the end of last year as property prices reached lows but now evidence of price stability in the housing market has encouraged owners to sell instead.

‘This may be the first indication that the stabilisation in the residential sales market is having an impact on the number of accidental landlords entering the lettings sector,’ said a RICS spokesman.

It now expects rental prices, which had been falling, to start to stabilise.

The balance of surveyors reporting a fall rather than a rise in rents was 29% in the quarter, compared with 55%.

In an optimistic sign for buy-to-let landlords, an increasing number of agents expect rents to rise in the coming months.

The balance expecting a fall rather than a rise improved from 25% to 6%, RICS said.

‘The number of properties coming on to the rental market has slowed as the sales market has begun to stabilise.

This is good news for landlords, who were coming under pressure to reduce rents as a result of oversupply.

The need to respond in this way is easing and, providing the housing market holds firm, the outlook for the rental market should continue to improve,’ the spokesman added.

However, the change in sentiment could put those searching for affordable accommodation at a disadvantage.

Figures from RICS, due next week, are expected to show that housing market activity continued to improve in August.

source: http://www.propertywire.com