House prices continue on the up and up
The year-on-year increase reflected growth of 4.1% in England, 1.1% in Northern Ireland and 1% in Wales offset by a fall of 0.7% in Scotland. Meanwhile prices in London are increasing faster than the UK average.
Annual house price increases in England were driven by London (8.7%), the East Midlands (3.8%) and the West Midlands (3.5%).
Andy Knee, chief executive of LMS, said: “Although London continues to be a focal point of activity experiencing a rate of growth more than double (8.7%) that of the next best performing region, the Midlands at 3.7%, this should not overshadow the fact that all regions apart from Scotland have witnessed a rise in the average house price over the past year.
“These figures show that there is not a bubble but rather that there is a national upward trend being experienced by almost everyone.”
In August 2013 the UK House Price Index surpassed its previous peak in January 2008, which stood at 185.5, by 0.3%.
Excluding London and the South East UK house prices increased by 2.1% in the 12 months to August 2013.
And in August 2013 prices paid by first-time buyers were 4.9% higher on average than in August 2012. For owner-occupiers prices increased by 3.3% for the same period.
Nicholas Ayre, managing director of home buying agency Home Fusion, said: “House prices continue to rise so it is no surprise that first-time buyers are also having to pay more with prices 4.9% higher than in August last year.
“But record low mortgage rates generally mean that affordability is not an issue – yet. However this is something that does need keeping an eye on and borrowers must ensure that they don’t overstretch themselves.”
Richard Sexton, director of e.surv chartered surveyors, said: “The housing market is rollicking along. Banks are more willing to lend to borrowers with low deposits. Consumer confidence is on the rise. And Help to Buy is set to open the door to thousands more buyers over the coming months.
“Make no mistake the scheme is desperately needed by borrowers across the country from Hampstead to Harrogate, from Wimbledon to Walsall. Borrowers everywhere want help.
“There are plenty of wannabe buyers in London with decent jobs who can’t possibly save for a 20% deposit without assistance.
“Inflation continues to ransack personal finances, savings rates are low and so is wage growth. People need help saving for the deposits which house price rises are making more expensive.”
Ben Thompson, managing director of Legal & General Mortgage Club, said: “Continued rises in house prices indicate that confidence has started to return to the market. This has been helped in part by government initiatives such as Help to Buy 2. Our own research supports this with 31% of UK consumers stating that they feel more confident about buying a home today than they did 12 months ago.
“Whilst these rises are positive for those already on the ladder, over inflated prices make the dream of homeownership harder still for those still renting and looking to buy in the future.”
Thompson said ideally house prices would grow slowly at or below the level of inflation over a number of years and housing stock would increase in order to meet the demand.
He added: “Affordable new homes need to be built in the right parts of the UK enabling house prices to stabilise and creating a more sustainable market place.”