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Thinking about a house

The latest figures from the Nationwide Building Society, show house prices only rose by 0.1% in June, which is the slowest increase since February, bring the average UK house price to 170,111. This meant annual house price inflation was down from 9.8% in May to 8.7% in June.

However, according to The Royal Institution of Chartered Surveyors (RICS), this is to be expected. This is because more properties have recently come onto the market, pushing up supply whilst demand remained the same. This obviously will have a cooling effect on the overall health of the housing market.

Manchester was one place to see house prices rise above the national average. But, according to one city estate agent, the amount of houses on the market in June 2010 was also up compared to the same time last year by 24.5%.

One of the reasons behind this increase in housing stock is the Coalition Government''s abolition of HIPs. Home Information Packs were never particularly popular with homeowners so its no wonder their abolition has led to a corresponding rise in the number of new instructions coming onto the market. RICS figures show that the number of houses coming onto the market rose from 11% in April to 21% in May, straight after HIPs were abolished.

However, RICS believe the resulting increase in supply now that HIPs are no longer required is boosting optimism within the housing market. This is even in spite of concerns over a lack of mortgages and a stagnating economy.

This is music to homebuyers'' ears because it means it is now a buyers market. Surplus supply in relation to demand, means greater choice and bargaining power for buyers.

First time buyers are also getting a much-needed break as a result. Along with an increase in the number of high loan-to-value mortgages, increased supply and lower prices means they are more likely to get the house they want. Property developers and buy-to-let buyers are also going to be pleased and families and couples looking for a ''project'' i.e. a way to make money from the housing market, are also in luck.

Over the coming year and into 2011, house prices are expected to remain subdued, however, as the deficit decreases and fears over a double-dip recession are expelled, the property market will rise again, meaning investment in bricks and mortar now could prove prudent for the future.

Eliseo Ruckdaschel is a property expert with 15 years experience. They recommend Philip James for help finding didsbury letting agents.

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