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House prices Increase By 8%

House prices Increase By 8%

According to new figures from the Office for National Statistics (ONS) house prices rose by 8% in the year to March as property values continue to increase “strongly across most parts of the UK”. On a seasonally adjusted basis house prices fell by 0.5% between February and March, with house price inflation reaching 8.5% in England, 4.9% in Wales, 0.8% in Scotland and 0.3% in Northern Ireland. The ONS said that annual house price rises in England are being driven by a 17% year-on-year increase in London, a 6.6% rise in the East and a 6.1% uplift in the South East. The average house price in London has reached £459,000. Nationally the average house is now worth £263,000 in England, well above Wales (£164,000), Scotland (£181,000) and Northern Ireland (£132,000). The ONS said that first-time buyers now face having to pay 10% more than they did a year ago to get a foot on to the property ladder, with the average price of a starter home standing at £193,000 in March. If you would like further information about any residential property matter, speak to a property lawyer.

A separate report published by Rightmove has revealed average house asking prices have risen 3.6% since April. The figure now stands at £272,003. The average asking price for a property in London was the main contributor, having been found to have risen by £80,000 since January, a 16.3% year-on-year increase. Rightmove cited a consistently high level of first time buyers and a late Easter period as potential reasons for the increase.

Cameron considers changes to Help to Buy

Meanwhile, David Cameron has suggested he would make changes to the Government’s Help to Buy policy, if the Bank of England suggests changes are needed. Mark Carney, the Governor of the Bank of England, recently signalled he is ready to take action to cool the housing market amid growing concerns over the threat that a new property price bubble could pose to the economic recovery. Mr Carney said the Bank could adopt a range of measures – including imposing a new “affordability test” for borrowers and advising the Government to rein in Help to Buy. Mr Cameron said: “Of course, we will consider any changes that are proposed by Mark Carney. But, as he said, this is a well-targeted scheme and it’s helped tens of thousands of people get on the housing ladder and to have mortgages.”

The Treasury minister Andrea Leadsom added that there were a number of issues for the Government to consider. She explained: “The thing is it’s a fine balance. In London prices are rising quite fast. In the rest of the country – and in the country as a whole – they remain 15% in real terms below their pre-crisis peak.”

Lloyds introduces curbs

Lloyds Banking Group, the UK’s biggest mortgage lender, has taken steps to curb what it calls “inflationary pressures” in London’s housing market. The state-backed lender said that on house purchases worth more than £500,000, it would no longer approve mortgages in which people are borrowing more than four times their income. Stephen Noakes, Lloyds group director of mortgages, said: “Whilst the housing market outside of London is starting to improve, the recovery is fragile and prices largely remain below their peak. It is important we don’t disrupt this recovery. But in London, house prices are almost now 30pc above the 2007 peak. This is largely driven by issues of supply which are particularly acute in London and this is having an impact on income multiples which are failing to keep pace with asset growth.” Mr Noakes added that Lloyds still supports Help to Buy as it has raised confidence in the housing market particularly outside of London.

IBB’s team of property solicitors can advise on all aspects of buying, selling and mortgaging property. We are always happy to speak to you about the progress of your sale/purchase on the telephone at any time. For more information or advice from our residential conveyancing solicitors, call us today on 01494 790013 or 01494 790071 or email conveyancing@ibblaw.co.uk