According to figures from the Office for National Statistics (ONS), house price inflation is continuing to edge up. In fact, UK house prices increased by 10.5% in the 12 months to May 2014, the highest rate of annual growth seen in four years.
This is a noticeable increase from April's annual growth rate of 9.9% and puts the typical UK home at £262,000. This pace of growth is mirrored in the monthly figures – house prices are now 0.8% higher (or £2,000 more expensive) than they were in April, compared with an increase of 0.3% in average prices during the same period a year ago.
Prices are growing strongly in most parts of the UK (it's only prices in Northern Ireland that fell in the 12 months, dropping by 0.7% year-on-year), but it's still London that's leading the way by posting an annual growth rate of 20.1%. Excluding London and the South East prices rose by a much more modest 6.4% in the 12 months to May, suggesting that the prospect of a bubble isn't a concern for much of the country.
Nonetheless, prices are still rising, and it's this which could partly explain the growing prevalence of shared ownership. According to research from Santander Insurance, one in five Brits surveyed are planning a property purchase in the next two years – and 77% of those purchases will be made jointly.
Perhaps surprisingly, the bulk of these won't be made between married couples. In fact, 39% of these joint transactions will be made between friends or relatives (4%), parents (13%) and unmarried couples (22%) – a clear contrast to current figures where just 12% own a home with an unmarried party.
However, the reason for buying together isn't so surprising. Affordability is the key driver behind joint purchases, with 23% saying that shared ownership is the only way they can get a foot on the ladder and 13% saying it'll leave them less financially stretched. A further 15% will do so to buy a bigger property while 9% want to take advantage of a good investment opportunity, with just 16% choosing to buy together because they actually want to live with the other person.
It could prove to be a good decision, particularly with prices continuing to be on the rise. In fact, prices paid by first-time buyers are now 11.3% higher, on average, than they were a year ago, so if you're thinking of taking the plunge and making a joint investment it could be time to start scouring the market.
As long as the right precautions are made it could well be a cost-effective choice. Getting the contract sorted will of course be a must, as will investing in suitable protection insurance – 27% of those who are planning or considering joint home ownership have no plans to buy this kind of cover, despite the fact that the majority admit they wouldn't be able to afford the financial commitment on their own – and then it all comes down to finding the right mortgage.
Although rates are starting to edge up there are still a lot of great deals to be found, even if you've only been able to amass a small deposit. Check out our pick of the best mortgages whether you're buying together or alone, and see if you can get on the ladder before prices rise too much.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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