Brokers have welcomed new official figures showing that house prices in England and Wales are within a whisker of their all-time high.
House prices rose 4.6% in the year to May, according to the latest Land Registry House Price Index.
This lifts the average property value in England and Wales to £179,696, a fraction below the pre-crisis peak of £180,990 in November 2007.
But there was no instant post-election boom, with prices in May at the same level as in April.
Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said the data showed that house prices continue to march upwards, with London and the South East seeing the greatest growth.
“Mortgage approvals are also at their highest since the Mortgage Market Review (MMR) was implemented, according to BBA figures."
Murphy said that consumers can be thankful for the mortgage price war which continues to drive rates to record lows. “Cheap pricing and lender competition are key factors that are sustaining the momentum in the housing market."
But he warned that low rates won’t last forever.
“The latest signs from the Bank of England are that there may be less than a year to go before the base rate rises, so the second half of 2015 will be a crucial window to act for anyone considering remortgaging, as well as potential homebuyers."
Murphy said rising house prices were squeezing more aspiring first-time buyers off the property ladder. “It is widely assumed that spending cuts will dominate next month’s emergency Budget, but the Government mustn’t forget the need to increase housebuilding and avoid an affordability crisis.”
Stephen Smith, director, Legal & General Mortgage Club and Housing, said the figures also showed that fewer homes are being sold than 12 months ago. “This further underlines that housing supply is unable to keep up with demand, which has an upward effect on prices.
“The recent market lag was perhaps due to pre-election jitters that caused many people to postpone taking the plunge.
“Demand is set to increase further over the remainder of the year, which will exacerbate the current imbalance between supply and demand and drive even more house price inflation.”
Smith said the trend will continue to worsen unless more houses are built. “The Government pledged to build more in the run up to the election, but we need more than just words on paper to make homes more affordable.
“Demand is set to increase further over the summer, so it’s vital that the government follows through on its promise and a strong pipeline of new homes is in production to tackle this critical issue.”
Adrian Gill, director of Your Move and Reeds Rains estate agents, said that demand at the lower end of the property ladder was "vigorous". “Buyers are being cheered on by some of the best conditions we’ve ever had for the property market – record low interest rates, mortgage rates, and plenty of support schemes like Help to Buy.”