Housing recovery spreads cross-country - Mortgages - News - Moneyfacts

News

Moneyfacts.co.uk News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Housing recovery spreads cross-country

Housing recovery spreads cross-country

Category: Mortgages

Updated: 17/10/2013
First Published: 17/10/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

According to Home.co.uk's Asking Price Index house prices in England and Wales have risen a further 1% in the last month, the biggest monthly rise since May 2011, and are up an impressive 5.5% on last year.

This rapid growth is still being led by London where prices were up 2% last month and are a whopping 12% higher than in October 2012, but the recovery is spreading with more areas contributing to the growth – in fact, Scotland is the only area of the UK that's reported house price deflation (at -1.4%) over the last 12 months.

The South East reported price rises of 7% since October 2012 whilst the South West is tipped to become another high-performing region with a growth of 4.6% in the last 12 months, and the recovery is even spreading northwards with the East Midlands reporting price rises of 4% and the West Midlands showing a 3.5% increase.

But there's growing concern that regional bubbles could eventually burst. The imbalance between supply and demand continues to fuel the level of house price inflation as demand for housing far outstrips supply, and the situation is only getting worse.

Across the UK the supply of fresh stock is down 18% on this time last year whilst in London there are 31% fewer properties coming to market, and although it's good news for sellers with the average time on the market falling 8% over the last 12 months it means house prices are continuing to rise – bad news for homebuyers, whose average 1% salary increase can't compete with such rapidly rising house prices.

Of course, there are still marked regional variations, but figures suggest that despite Government-backed schemes (such as Help to Buy) affordability will continue to be an issue in the housing market for some time.

Doug Shephard, director of Home.co.uk, commented on the figures:

"House price growth is now sweeping north and west from the capital. Welcome news for homeowners, but troubling for potential buyers whose salaries are not increasing anywhere near as fast.

"Until real wage growth matches house price inflation, housing affordability will become increasingly difficult and a distant dream for many."

What next?

Check out the best mortgage rates

Find out more about Help to Buy

Use our handy mortgage calculator

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.

Related Articles

Homemover numbers fall for first time since 2011

The mortgage market enjoyed a record year in 2016, so it may come as a surprise to hear that the number of people moving home has fallen for the first time in five years, with fewer apparently taking advantage of the market.

2016: the best year for remortgaging since 2009

Remortgaging has certainly seen a surge in activity of late, helped in no small part by the dramatic drop in mortgage rates over the last year, so much so that 2016 as a whole proved to be the best year for the sector since 2009.

Homeowners underestimate remortgaging savings

Remortgaging has been enjoying a surge in popularity in recent months, and considering how much you could save, it’s a no-brainer! Unfortunately, many fail to realise the extent of potential savings, which could mean too few make the switch.
 
Close