DCSIMG

House price rises cause fears for market

The average price of a property in the UK is now �252,000. Picture: Jane Barlow

The average price of a property in the UK is now �252,000. Picture: Jane Barlow

  • by RORY REYNOLDS
 

House prices have risen by 8 per cent in the space of 12 months – and 17 per cent in a single year in London.

Figures show the average price of a property in the UK stood at £252,000 in March, just £1,000 below a peak recorded in February by the Office for National Statistics’ (ONS). In London, values have leapt more than twice as fast as the national average, pushing average prices there to £459,000.

In the 12 months to March, prices saw a typical increase of 8.5 per cent in England to reach £263,000, 4.9 per cent in Wales to reach £164,000, 0.8 per cent in Scotland to reach £181,000 and 0.3 per cent in Northern Ireland to reach £132,000, according to the ONS.

The Prime Minister said he would consider making changes to the government’s flagship Help to Buy mortgage scheme in an attempt to cool the market. And Bank of England Governor Mark Carney has signalled he is ready to take action amid growing concerns over the threat that a new property price bubble could pose to the economic recovery.

Campbell Robb, chief executive of Shelter, said: “Our housing market is reaching boiling point. With every rise in house prices leaving more people priced out or stuck in cramped homes, rollercoaster house prices are rapidly losing their feelgood factor.”

TUC general secretary Frances O’Grady said: “Rising house prices across the UK are making it extremely difficult to get a foot on the property ladder, while in the capital this has become an impossible dream for most young people.”

The ONS figures came as a report from think-tank the Resolution Foundation suggested one in ten mortgage holders risk being “imprisoned” by borrowing deals likely to make repayments unaffordable amid predicted interest rate rises over the next four years.

The study predicts around 770,000 vulnerable households will suffer from a limited ability to switch to a better deal and face the likelihood of monthly repayments eating up at least a third of disposable income.

New mortgage lending rules recently came into force, meaning applicants face more probing questions about their spending habits, to check they can afford their mortgage.

Housing minister Kris Hopkins said: “Help to Buy equity loan has helped more than 30,000 people to buy or reserve a new-build home, with 88 per cent of sales going to first-time buyers at an average price of £185,000.”

 

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