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Confidence in the housing market received a triple boost today as prices appeared to have bottomed out, builder Taylor Wimpey reported solid summer sales and it emerged that property speculators are once again buying off-plan in London.
Britain's biggest mortgage lender, the Halifax, said house prices rose 1.1% in July to an average cost of £159,623.
Prices have gained 0.8% in the three months to July - the first time since October 2007 that the trend is upward - thanks to a shortage of properties being put up for sale and growing interest.
It came as Taylor Wimpey said its order book has expanded by 67% since the start of the year. The housebuilder also said prices have stabilised, cancellations have fallen and the number of potential buyers nosing around has risen.
"We are becoming increasingly optimistic every month - we have seen six months of price stability," chief executive Pete Redfern said. "We are no longer chasing sales volumes any more and can now start reducing the incentives we are offering buyers."
It plans to open 40 new sales outlets in the UK this year and is once again buying land.
The first of the major housebuilders to report first-half results, Taylor Wimpey was still forced to wipe £527 million off the value of its land and work in progress. This meant losses for the six months widened to £681.9 million, pushing its shares down 1.9p to 38.1p.
But Redfern said that this is expected to be the last of its writedowns, unless " there is another material shift downwards in the property market".
He added that one cause of optimism was the return of cash-rich buyers, putting down deposits on unfinished properties. These had deserted the market when prices were falling amid fears of overpaying.
Nine of the 11 luxury homes at Taylor Wimpey's Colebrook Collection redevelopment in Islington have sold off-plan at prices up to almost £2 million. At its Sandringham development in West Ruislip, 26 of the 113 homes have been reserved before building is completed. At a third site in Barking, on the former campus of the University of East London, Taylor Wimpey took deposits on four apartments at its launch last weekend.
Meanwhile, Barratt Developments has received reservations for almost half of the flats at its luxury apartment block in Westminster's Rochester Row, a year before the project is due for completion.
Reader views (6)
Why is it "good news" that house prices have gone up? Are you able to THINK? First time buyers are simply unable to properly afford the insane price of putting a roof over their head, unless they take out irresponsible or fraudulent loans to do so. And many of the lenders want them to be stretched to the very limits, so that they can make higher "profits"; and if people foreclose and the lender goes bust? Why, the taxpayer bales out the lender. Absurd, but this is what has happened already, with Northern Rock, Bradford & Bingley, HBOS, etc etc. It is a total scandal.
- Paul, Sidcup UK, 23/09/2009 00:09
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great to hear property market shows sign of recovery but total shame on Wimpey for saying they can now reduce the inducements they have been offering purchasers. does the greed of investors cause such immediate mental blocks as to how all of europe got into this awful mess? shame , shame and shame
rory
- Rory Conway, cork , ireland, 22/09/2009 16:35
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Congratultions and well done Gordon Brown for rescuing the country from the worldwide economic recession, which has hit many other countries far harder than it has us here in the UK
vi cariously
- Keith Price, Luton England, 22/09/2009 15:35
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Bricks and mortar are cheap; its houses that are expensive and over-priced.
It has something to do with Estate Agents; Solicitors, and Mortgage interest rates, and Governments wanting you in debt for the rest of your lives; as that stops you striking for better pay.
Even if you want to build your own house you can’t; the planners won’t let you?
- Mickinlondon, london., 22/09/2009 15:35
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MICKINLONDON, your'e spot on, overpriced and people desperate for a place to live, no matter what the price and the banks loaning over the odds to keep their property and mortage portfolios in credit.
- Paul, East London, 22/09/2009 15:35
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Fools' gold.
- Ted, London, 22/09/2009 15:35
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