House prices have shown another significant boost in February, increasing by £2,500 – the largest monthly rise for 21 months.
The price of the average UK home has hit a new record height, according to the LSL England & Wales House Price Index, standing at £257,951. The market has seen the biggest rise since May 2012, with the average price increasing by 1% in February and 6% annually.
Richard Sexton of LSL Property Services, said: "2013 may have been the year when the market got back on its feet, but it seems to be this year when we'll see it gallop onwards towards full health.
"For so long the housing market had to duck for cover from the fierce economic storm, but with the economy firmly on the mend and the jobs market picking up, this is hopefully well and truly resigned to the past. As we head into the typically busier spring period we are seeing a further strengthening of buyer demand which, combined with a thumping start to the year from the mortgage market, has bolstered confidence across the board."
Activity in the market has also seen a large increase, with total sales in both January and February up on a year before, with February being the strongest since 2008 with sales set to reach 66,000. This can most likely be attributed to the Government's Help to Buy Scheme and the vast range of mortgages available to first-time buyers at higher loan-to-values.
There are however vast regional differences, and although rises are being seen across the whole country, the capital is experiencing the biggest boom, with London's property prices showing growth of nearly double the rest of the country.
Although a boost for investors and those enjoying the equity in their property, there are fears of prices rising too high, locking first-time buyers out of the market and creating a potentially dangerous housing bubble. It is the discrepancy between supply and demand that fuels rises and with potential sellers holding back in anticipation of further rises and a lack of new build, prices could scale even higher.
Mr Sexton comments: "With buyers' appetite for bricks and mortar undiminished, unless we see a sudden wave of properties hitting the market this will become a recurring problem both in London and elsewhere.
"It's crucial that the Chancellor takes a blunt approach to challenging this supply issue in this month's Budget, rather than take steps to notch up property taxes which could disrupt progress just as the property market is racing ahead on the right track."
If you are looking to get onto the housing ladder, you may want to think about moving before further hikes are seen. Check out our mortgage calculator to see what you can afford and take a look at some of the competitive mortgage deals available at the moment.
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