House prices up 3.4pc year-on-year

Robyn Hall

October 28, 2013

London experienced the greatest annual price increase at 9.3% while Wales, the only region which recorded a drop in house prices, fell by 1.7%.

Nicholas Ayre, managing director of homebuying agency Home Fusion, said: “As expected property prices continue to rise across the country with London leading the way.

“However one does start to wonder whether pricing is accelerating away from affordability and whether we will reach a point where buyers are once again struggling to get on the property ladder.”

Ayre said cheaper mortgage rates and the increasing willingness of lenders to lend is helping buyers get a foothold.

He added: “Now buyers are thinking that if they apply for a mortgage they are more likely to get it. Many buyers have delayed a move for years because of the dire economic situation but many have had enough of waiting and are ready to make a move assuming they can find the right property.”

The monthly change from August to September shows an increase of 1.5%. The North East experienced the greatest monthly rise with a movement of 2.7% while Wales saw the most significant monthly drop of 0.4%.

During July 2013 the number of completed house sales in England and Wales increased by 17% to 69,140 compared with 59,141 in July 2012.

Meanwhile the number of properties sold in England and Wales for over £1m in July 2013 increased by 34% to 1,143 from 852 in July 2012.

Repossession volumes decreased by 28% in July 2013 to 1,187 compared with 1,645 in July 2012. The North East led the way with a 56% drop in repossessions compared to a 25% drop the month before.

Over 77,450 residential properties in England and Wales lodged for registration in September ranging from £10,000 to £15,550,000.

The South East topped the table of regional applications with 290,300 in September.

Jeremy Duncombe, director at Legal and General Mortgage Club, said: “The significant house price rises recorded today by the Land Registry will continue to fuel speculation that prices are rising too quickly. However it’s worth remembering where the market has come from.

“A year ago it was beset by lethargy so the impetus created by the various stimulus schemes should not be wished away too quickly. It is also worth remembering that Help to Buy is a temporary measure.

“If the government needs to change its terms or withdraw it altogether to avoid the market overheating it can do so.

“The main long term problem is the chronic lack of suitable housing. This constrained supply is the main issue to solve if we are to ensure a stable, balanced and sustainable UK housing market in the future.”

David Brown, commercial director of LSL Property Services, added: “With house prices, sales and GDP all on the rise, the economy continues to move from strength to strength.

“We’re seeing rises across the country with the North East particularly benefitting from such a resurgence. The effects of Help to Buy and an easing of mortgage criteria is allowing more and more people to access the property market and in turn giving a boost towards a full and sustained recovery.

“First time buyers have been returning in their droves, with the effects flowing throughout the chain as backlog at the lower end of the market becomes unblocked. However, of course getting a grip on the ladder is still a tough task and some may opt to remain renting in the meantime, while they accrue a bit more in savings.

“But luckily, the rental market however is in a healthy state, as while rents have recently reached record highs, increases are still below inflation, all making it that little bit easier for aspiring buyers to save towards that much needed deposit.

“To maintain growth and sustain a healthy market, we must ensure that surges in buyer demand are matched by more homes being built, if we are to avoid any future rises getting beyond reach.”

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