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TODAY'S OTHER NEWS

UK house prices climb and outlook brightens

UK house prices rose by 5.2% over the last year helped by the return of the first-time buyer.

The annual pace of growth dipped slightly from 5.7% in June, according to the figures from the Council of Mortgage Lenders (CML), but the rest of the year should see healthy lending levels.

Paul Smee, CML director general, said: “The market has shown steady growth in house purchase and buy-to-let over the past few months with general improvements in economic factors across the UK allowing for more people to enter the property market.

“This positive direction of travel going into the autumn months reinforces our recent revised forecasts that lending levels should continue to grow gradually over the rest of the year after a subdued beginning of the year.”

Annual house price annual inflation was 5.6% in England, 0.3% in Wales, 7.4% in Northern Ireland and -1.3% in Scotland.

But the pace of growth slowed across the majority of the nine English regions in July 2015.

The largest annual increase was in the East at 8.3% and South East at 6.7%, although both were slightly down on July.

The North East was the only English region to see a fall in prices, by 0.7%.

London prices increased by 5.5% over the year to July, up from 5.3% in the year to June.

Excluding London and the South East, UK house prices increased by 4.4% in the 12 months to July 2015.

Jeremy Duncombe, director, Legal & General Mortgage Club, welcomed the increase in first-time buyer activity but said they are still facing difficulty getting on the property ladder. “House price inflation is climbing faster than wage growth, which is causing prospective buyers to be priced out of the market.

“Those without pre-existing equity built up in property are particularly affected, as they aren’t able to offset this increasing cost with money gained from an increase in the value of their own home.”

Duncombe said Government initiatives such as Help-to-Buy and the growth in 95% LTV lending are welcome but failed to tackle the source of the problem, which is a shortage of property.

Andy Frankish, new homes director at Mortgage Advice Bureau (MAB), said: “Today’s Inflation Report from the Bank of England emphasises that there is ever-increasing demand for house purchase, and it is no secret that consumers are jumping on the property ladder to make the most of the rock bottom mortgage rates before interest rates rise.

“It is therefore essential that new properties are brought on to the market, not only to cater for rising demand, but as a long-term solution to prevent excessive increases in house prices.”

Adrian Gill, director of Your Move and Reeds Rains estate agents, said price growth in London is “beginning to mount a counterattack” as buyers adapt to the new tax regime.

“Buyer morale is very high all across the country, and the going looks good as economic conditions pave the way for a continuation of cheap borrowing for the remainder of the year.”  

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