House Prices Up 8% in a Year
House prices have risen by 8% in the year up to the end of March 2014: This is the conclusion of the latest survey from the Office of National Statistics (ONS). It is down slightly from the 9.2% increase in the twelve months to the end of February, reflected in a quoted 0.5% fall in March. London, of course, is out on its own with an annual house price increase of 17% and once the capital and the south east are stripped out of the statistics, the average house price rise is a more modest 4.7%.
These statistics come on top of similar figures from the big mortgage lenders and have prompted calls from analysts for the Government to curb the Help to Buy scheme. Prime Minister David Cameron said that it was a “well-targeted scheme” that had helped “tens of thousands of people” onto the property ladder. The opposition have said that at £600,000, the scheme has too high a ceiling for the tax payer to be guaranteeing mortgages.
The Bank of England chairman, Mark Carney said that he was watching the market carefully, and will inform the chancellor if changes are needed. The bank has the power to control interest rates with analysts believing that if they were to put them up, around 770,000 people could be ‘imprisoned’ by a limited ability to switch mortgages. This figure represents around one in ten mortgage holders in the UK.
In a market already low on transactions, new mortgage lending rules being implemented in recent weeks have slowed down the number of loan approvals. Applicants now face a more intrusive mortgage approval process and Lloyds TSB have recently announced that they will be limiting mortgage lending to four times income for loans worth more than £500,000.
Sources: bbc.co.uk, ons.gov.uk (image courtesy of theinformationdaily.com)