North house prices holding steady or increasing

Jul 2 2008 by Sam Wood, The Journal

HOUSE PRICES in parts of the North have bucked national trends by holding steady or even increasing in value in the face of escalating falls elsewhere.

New figures released yesterday by the Nationwide Building Society, the country’s biggest mortgage lender, revealed that while house prices nationally fell by 4% in the last three months year on year, in Northumberland they had remained static.

And Carlisle, Cumbria, actually saw a 3% increase in house prices compared to last year.

Other parts of the North East didn’t fare so well.

In Durham the fall in house prices was 6% year on year, while in Tyne and Wear it was 4%. As a whole, the region saw a 3% fall year on year in house prices, lower than the national average.

Housing experts in Northumberland said there seemed to be a trend of people moving back to the region from elsewhere, which could be helping to keep prices stable.

Tim Hawe, valuation surveyor at estate agents Strutt and Parker, said: “This shows the resilience of the housing market in Northumberland. There is a lack of quality new-builds in the region which means supply and demand is keeping prices high.

“One thing we have noticed is that people seem to be coming back to the area.

“About 70% of sales in the last month have been to people relocating to Northumberland. Many of them seem to have connections to the area and have decided now is a good time to move back.”

And Mr Hawe was relatively optimistic that prices in Northumberland may continue to buck trends. As long as people are being realistic, there are people out there who want to do deals. If we can keep confidence in the region high, I can see prices remaining strong,” he said.

Justin Amin, managing director of Pattinson’s Estate Agents, was optimistic despite reports of house price falls. He said: “At the moment it is all about managing people’s expectations. Homes will still sell if they are priced sensibly.”

Nationally, experts put the fall in house prices down to the difficulties in obtaining mortgages because of the credit crunch. And they also said it was unlikely there would be a turnaround soon.

Fionnuala Earley, Nationwide’s chief economist, said: “The tightening of credit conditions over previous months, along with changing expectations of house price growth and a general weakening in consumer confidence in the economy, have hit mortgage demand and led to a severe slowing in the levels of housing market activity.

“Transactions are a key driver of house prices. With house purchase transactions so far below their long-term trend, it seems unlikely that there will be any rapid turnaround in housing market fortunes in the coming months.”