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TODAY'S OTHER NEWS

House prices hit record high and there's more to come

House prices in England and Wales hit a post-crisis high in June with the average price rising to £181,619.

That finally tops the previous peak of £180,983 set during November 2007, just two months before Northern Rock was taken into state ownership.

Mortgage brokers have welcomed this fresh sign of property market confidence and predict further increases to come.

London once again recorded the strongest annual growth, with values surging 9.2% to reach £481,820.

The lowest annual price increase was in Yorkshire & The Humber at 1.4%.

However, Land Registry data for house sales in April showed the number of completed sales in England & Wales fell by 19% as supply dries up.

Brian Murphy, head of lending at Mortgage Advice Bureau (MAB), said strong rates of house price growth are not just limited to the South, with the North East experiencing the largest post-election surge in June.

“Even so, there is still a clear North/South divide with annual growth of more than 7% in London, the South East and East likely to give many aspiring homebuyers a sense of vertigo.”

Murphy said supply shortages are likely to drive growth for the foreseeable future. “The mortgage price war has helped by making loan rates more affordable, but with the Bank of England edging closer to a base rate rise, it is unlikely that such consumer-friendly rates will be a feature of the market for too much longer.”

Murphy added: “Now a base rate rise is on the horizon, would-be buyers and remortgagers should act fast if they want to get the best deals.”

Jeremy Duncombe, director, Legal & General Mortgage Club, said news that house prices rise in June was "a double-edged sword". "Homeowners will be pleased to see the value of their homes increasing, but those looking to get on the ladder rising house prices make it harder to save up for a deposit.”

The lack of new homes isn't the only reason behind property shortages.

Duncombe said: "Many people are choosing to invest their homes by improving or extending them so they can live in them for longer.

“This means houses aren’t coming on the market as frequently as we have seen in the past further exacerbating the lack of supply in the market.”

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