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Buyer optimism up with house prices in February

Friday, 11 March 2011 2:12 PM

Britain's house buyers are feeling increasingly optimistic about the market's future, according to new figures from LSL Property Services.

The group's latest House Price Index revealed that February saw monthly house prices increase by 0.3 per cent – encouraging news for UK homeowners.

But despite the slight improvement, property values have still fallen annually by 0.5 per cent, as the strong gains of early 2010 are now too far in the past to count.

The number of transactions in February increased by 2.4 per cent to 41,200 – but this is still just 61 per cent of the long-term average.

Richard Sexton, business development director of e.surv, commented: "The best performance has been in the market for prime property in London and the south-east, but there are also encouraging signs from the mortgage industry, which could bring about a more widespread and sizeable recovery."

He added: "The proportion of mortgage products requiring more than a 25 per cent deposit is at a two-year low and many of these new products are for high loan-to-value [deals].

"Nevertheless, product numbers alone can be misleading. Lending is still constraining demand as mortgage lenders are concerned about the possibility of rising unemployment as the public spending cuts continue," Sexton warned.

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