"House Prices in England & Wales Hit an All-Time High”
The average home in England & Wales now costs £232,969 - £1,140 higher than the previous peak recorded in February 2008. This is according to a report by LSL Property Services, which said that property prices were being driven up by a strong demand in London and the easing of lending conditions – thanks largely to the Bank of England-backed scheme, Funding for Lending.
But a certain amount of caution has to be applied to these figures; house prices have gone up by 7.1% in London over the last twelve months, compared with 2.6% for the remainder of England and Wales. This of course skews the average figure across the two countries.
Government schemes such as Help to Buy have brought the first-time buyers back into the market, which can only be a good thing. The Council of Mortgage Lenders (CML) said that 45% of all mortgages advanced in May were to first-time buyers, which compares to an average of 38% per month in the last market peak in 2007. However, low transaction levels mean that even in that peak month of May, there were actually around 10,000 less first-time buyers compared to the average month of 2007.
However, the big boom seems to be in buy-to-let mortgages; buy-to-let lending reached its highest level since 2008 as the Bank of England’s Funding for Lending scheme translated into low interest rates for would-be landlords. The CML said 40,000 buy-to-let mortgages, worth £5.1bn were advance between April and July this year.
Sources: thisismoney.co.uk, cml.org.uk