UK house prices rose at the rate of £263 a week in September as the blockage at the bottom of the market finally starts to ease, according to new research.
Prices rose £8,526 in the last year and £1,127 last month, according to new research from LSL Property Services. The average house price is now £235,534.
Sales are also rising sharply, up 12% on last year.
David Brown, commercial director of LSL Property Services, said 2013 will be remembered as the year first-time buyers returned to the market. "What a difference six months makes. We’ve seen banks ease criteria on mortgages for people with small deposits, which has opened the door to new buyers who have spent years on the outside looking in.
"More people are in work. Inflation has begun to ease. And clearer forward guidance on interest rates has brought more certainty and confidence."
The return of the first-time buyer has triggered a ripple of activity all the way up the housing ladder, Brown said. "It is starting to unclog the blockage at the bottom end of the market, which is helping make the whole system more fluid.
"Demand has been bottled up by a lack of mortgage finance, but now mortgages have been made more accessible the backlog of buyers has spilled onto the market after years of frustration, scrimping and saving."
Brown warned that this is still only a fledgling recovery. "First-time buyer numbers are still some way short of their historic levels. It is not a boom or a bubble, it is a market correction, albeit a fairly quick one.
"The only boom is the loud noises coming from alarmists and sensationalists warning about a return to the bad old days. We’re not even close to that.
"There is no sub-prime mortgage lending, no lending above 95% LTV. Credit checks are tough, rates are fairly high on high-LTV mortgages, and lenders now carry out stringent affordability checks for every single mortgage.
“The South East is dominating the market because it has more equity-rich buyers, with London the target for scores of foreign property investors. The improvements in the North are much less pronounced, and there is still plenty of room for improvement.
"Help to Buy is needed to make the market accessible to the many, not just the few. It does, however, need to be complimented by more house building so supply keeps pace with demand.”
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