Several indices show that house prices grew at their highest rates since 2007 during 2013.
The LSL Property Services’ latest house price index indicates prices increased 5.2% or £11,920 in 2013, whereas Halifax put the increase at 7.5%. Despite variations in these statistics the overall trend appears to be one of steady growth in the UK property market throughout 2013.
It appears that average house prices rose around £1,489 in December to £240,134, a new record for England & Wales, and the West Midlands saw the second highest regional price growth outside of London.
A spokesperson for LSL has said that the recovery of the property market is showing no sign of slowing down. With buyer demand strong and still growing he does not see housing in “bubble territory” as price growth and sales are both still some way off their pre-crisis levels.
What’s more the price momentum is spreading out from London and the south-east into the regions. There are signs that a universal recovery is taking hold, as for the fourth successive month all ten regions in England & Wales have seen price rises.
LSL researchers think the coming year looks bright for the UK market, largely thanks to the government’s Funding for Lending and Help-to-Buy schemes, and the current record low interest rates.
Mortgage availability has improved and cheaper mortgages, along with an easing of some lending criteria have made things easier for 1st time buyers and investor landlords.
The rise in prices trend is being matched by a boost to house sales with a 34% increase since December 2012.
The surge in the number of first-time buyers making moves to into the market is keeping confidence levels high and the building industry is feeling the effects of this.
LSL figures show East Anglia and the North West as the fastest growing areas, with sales over the past year up over 26%. But London and the south-east ranked much lower in terms of sales, despite the fact that it is the area with the largest rise in prices.
Most first-time buyers are unable to afford to live in the capital as properties are moving well beyond their reach, largely due to demand from foreign buyers and a severe shortage of suitable housing in the city.
With new mortgage rules and the end of the Funding for Lending scheme in April, it is likely there will be a slowing down effect in 2014, easing fears of another housing bubble.
However, the government appears to be pinning its hopes on the Help to Buy scheme as the election approaches as a means of stimulating house building and the economy generally, and at the same time addressing the severe shortage of housing.