November 14th, 2013
Figures released this week by leading mortgage-lender Halifax have revealed that UK property prices rose by nearly 7% in the first three-quarters of the year, amid healthy interest in both phases of the government-backed ‘Help to Buy’ schemes.
In the capital, that figure has been even more positive, with a 9.3% rise in house prices in the 12-month period to September this year.
It makes the average house price in London an eye-watering £393,462; more than double the national average of £171,991.
New-build giant Taylor Wimpey has however revealed that there may be a reason for this that is not entirely good news.
It states in its interim statement, released this week, that it has ‘sold out’ of new homes; with 2,403 properties having been reserved through the initial phase of the ‘Help to Buy’ scheme, introduced last April.
“The UK housing market has remained healthy in the second half of the year, with better mortgage availability and consistent demand for our homes leading to an increase in sales rates against the same period last year” said Pete Redfern, chief executive of Taylor Wimpey.
It suggests that buyers – particularly those who have never owned before – may be trying to ‘beat the rush’ before prices rise, and interest rates return to a more historical level.
And with reports this week of unemployment beginning to fall, we could potentially see a review in the Bank of England base rate sooner than first thought.
“There is a worry that, as time goes on, it could become more and more expensive to get on the property ladder” said Taj Kang, Operations Director at Contractor Mortgages Made Easy.
“Now is a very good time to look at mortgage funding options, particularly for those contractors with less available for a deposit. The introduction of the second-phase of the ‘Help to Buy’ scheme has triggered a wave of new 95% loan-to-value products across the market, which has in turn made products at lower levels more competitive.”
A five-year forecast by property group Savills this week has also suggested that the downside of this recent spike in interest could be that affordability becomes an issue.
“The worry is certainly there that, as interest rates rise to ‘normal’ levels in future, this could in turn mean that the cost of buying property becomes far higher, which could potentially explain the urge for contractors to look at getting on the ladder now, rather than risk missing out” added Taj Kang.
Article by: Mark McBurney, Senior Mortgage Consultant at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager
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