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TODAY'S OTHER NEWS

House price growth hits double digits again

House price inflation has hit double digits for the first time in almost two years with prices rising more than £20,000 in the year to March.

Prices are now at a new record high of £214,811, as measured by the latest Halifax house price index.

The average UK property rose ny 10.1%, or £21,587, in the three months to March compared to one year earlier.

This is the biggest annual jump since July 2014 and the second biggest since September 2007, before the financial crisis.

Martin Ellis, Halifax housing economist, said: "House prices in the first three months of 2016 were 2.9% higher than in the final quarter of 2015. The annual rate has grown from 9.7%.”

Ellis warned that worsening sentiment over the UK economy and Brexit could result in some “softening” over the next couple of months.

But he added that low interest rates and a healthy labour market suggest that house price growth is set to remain robust.

Brian Murphy, head of lending at Mortgage Advice Bureau, said the surge coincided with the last-minute rush among investors looking to beat the stamp duty tax surcharge on 1 April.

“Although this may come as another blow to those trying to get their foot on the property ladder, today’s rock-bottom mortgage rates and the huge number of products available means mortgages are far more affordable than we have seen in a very long time. 

“However, meeting stringent affordability criteria and saving up for a deposit are significant hurdles."

Murphy expects house prices to follow a steadier trajectory as the market adapts to the new stamp duty changes.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said continued low mortgage rates and criteria easing are attracting buyers who remain confident that interest rates are not going to rise anytime soon.

“However, affordability remains an issue for some, and with Virgin Money reducing its maximum income multiples this week, it certainly isn’t a free-for-all on the lending front.”

Jeremy Duncombe, director, Legal & General Mortgage Club, said: “Another Index, another rise in house prices – plus ca change!

“As wage growth and inflation fails to keep up to speed with the ever rising house prices due to undersupply, many first-time buyers are feeling ever further away from the dream of property ownership.

“If we continue to ignore our housing crisis, we risk becoming a nation of renters not owners.”

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