UK House prices rise fastest for 2 years reaching record high

Landlord Expert
By Landlord Expert October 29, 2012 09:16

The 1.1 per cent rise in September for England and Wales was the biggest year-on-year rise since November 2010. It took typical prices to £162,561.

The annual increases were concentrated around the South –  with the South West, the South East, London and the East seeing rises.

However, the North, the Midlands and Wales suffered falls. London continued to drive the market with the biggest year-on-year price increase, up 5.5 per cent to take the average cost of a home to £363,802.

Overseas buyers are continuing to flock to the capital. The Land Registry reported sales of homes worth over £1million were up a fifth in July compared with a year earlier.

The North East saw the biggest annual drop, with the 3.2 per cent fall pushing down average prices to £99,163.

Overall, prices have been slowly lifting year-on-year since May to make up for falling in every month from January 2011 to April 2012 across the country.

However, house sales have been more sluggish than a year ago, with just over 52,300 a month on average between April and July this year. In the same period in 2011, there were 55,000 sales a month.

Experts have suggested that a lack of homes on the market is one of the main factors holding prices up, as buyers have far less choice.  The Olympics and the Queen’s Diamond Jubilee have also disrupted sales.

Although year-on-year prices were up, month-on-month figures were down 0.3 per cent in September following a 0.1 per cent fall in August.

Wales bucked the trend with a 0.5 per cent rise which took typical prices to £117,264 in September.

First-time buyers are taking out the longest loans in history – lasting 28 years, according to the Financial Services Authority.

This is the only way many can afford to get on the housing ladder.

The FSA revealed that half of first-time buyers ‘chose terms in excess of 25 years’ during the first half of 2012.

It added that typical young buyers are taking five more years to pay off their loans on average than in the past.

A ‘longer life loan’ makes it cheaper each month because regular repayments are lower but the interest bill balloons.

These deals can add many thousands to the total interest paid over the lifetime of a mortgage.

Young buyers are being hit by high house prices, partly fuelled by better-off buy-to-let investors, and a mortgage drought, making it hard for them to find a lender.

Landlord Expert
By Landlord Expert October 29, 2012 09:16

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