Property prices at four year high

Official house prices rise again

More first time buyers paying stamp duty

Irish Government too reliant on stamp duty

September sees robust commercial property activity

400 ft scheme gains approval

100% LTV mortgage insurance may help first time buyers

Property prices at four year high

UK property prices rose to their highest level in four years in September, mainly due to a shortage of property supply, according to the Royal Institution of Chartered Surveyors.

Over 45% more chartered surveyors reported a rise in prices in September than a fall, which is the highest number since October 2002.

Jeremy Leaf of RICS says: "Greater economic activity has created a ripple effect in house prices across the country.

"Continuing house price rises will make it difficult for the Bank of England to leave the base interest rate level at 4.75%."

Official house prices rise again

Average UK residential property prices rose 7.7% during the past year up to August, which is an improvement on the 6% gain recorded in July, according to official figures released by the Department for Communities and Local Government.

Price inflation in England rose from 5.5% in July to 7% in August; the inflation rate in Scotland rose from 9.3% to 12.8%; in Northern Ireland the rate rose from 18.3% to 25.9%. While in Wales the rate fell from 7.4% to 7.1%. 

Average residential property prices in August were £205,556 in England, £158,028 in Wales, £145,490 in Scotland and £166,398 in Northern Ireland.

London remains the most expensive place to buy a home in England, where average property prices stand at £286,369. The lowest average price was in the North East at £142,901.

More first time buyers paying stamp duty

The proportion of first-time buyers paying stamp duty has leapt from 48% to 56% in the space of just a year, according to the Council of Mortgage Lenders (CML), while only 5% of home movers escaped the tax in August, compared with 21% a year earlier.

CML director general, Michael Coogan, said: "Overall affordability has worsened a little, especially for first-time buyers. Over the period of a year, small monthly changes can nevertheless be significant - as the rise in the proportion of mortgage borrowers required to pay stamp duty shows.  For the rest of this year, we expect some moderation in activity although the market is continuing to outperform our earlier forecasts."

Irish Government too reliant on stamp duty

A fresh study by Davy Stockbrokers suggests that the Irish Government may be too reliant on stamp duty derived from property.

If property prices in Irelands were to fall back, then the Government would see a shortfall in its finances. A drop of 20% in the country's residential property market could hit the Irish exchequer by €3bn. This year, the Irish Government will collect at least €7.4bn in taxes on the property sector, representing 17% of all tax collected.

Author of the report, Rossa White, said: "A 10% increase on average in both price and volume (of houses, lands and commercial property) would be worth €1.85bn extra in tax receipts in 2007 compared with 2006. If price and volume both dropped 10%, receipts would decline €1.7bn year-on-year. Based on the tax profile for January-September, we think the property bonus amounts to about €1.25bn year-to-date. It could be €2bn for the full year."

September sees robust commercial property activity

Savills report that the rate of development activity growth in September rose from August's low, with commercial construction companies indicating a marked expansion of both private and public sector activity. The strongest upward growth trend was recorded for private sector new build activity, with the rate of expansion reportedly the sharpest for six months.

Matt Oakley, head of Savills Commercial Research department said: "As expected the general slowdown in the rate of growth in August appears to have been a seasonal blip. With private sector office construction having increased for the thirty-seventh consecutive month, it is no surprise that developers' optimism about the prospects for this sector cooled a little this month."

400 ft scheme gains approval

Richardson Cordwell has been granted planning consent to construct a 40-storey tower on Broad Street in Birmingham. The £75m, 400 ft scheme includes a four-star, 190-bedroom hotel and 342 luxury flats. Completion of the development is earmarked for 2009.

100% LTV mortgage insurance may help first time buyers

More first time buyers may soon be able to get a foot on the property ladder, according to insurer Genworth Financial, due to the launch of their specialist mortgage insurance product.

The company claim that their new product will help to mitigate the considerable risk associated with 100% LTV lending by covering lenders' risk.

As many as 57% of 21-40 year old property-hunters still believe that a deposit is required to secure a mortgage, according to research conducting by Genworth.

Tammy Richardson, managing director at Genworth, says: "Raising a deposit need no longer be a barrier to owning a home... Mortgage insurance for 100% LTV lending has a key role to play in providing first-time buyers with earlier access to home ownership while also enabling lenders to grow.”