House prices go through the roof to hit record high

AFS Team·17 June 2013·3 min read
House prices go through the roof to hit record high
House prices have climbed to a record high – beating the pre-slump peak of February 2008, according to a leading estate agent.

The average house put on an extra £900 in value in May 2013 – up 0.4% from April 2013 – to reach £233,061.

Over the past 12 months, prices have increased by £6,125, says LSL Property Services, which runs high street estate agent brands like Your Move and Reeds Rains.

However, enthusiasm for a turnaround in the market after five years of stagnation is tempered with caution.

The housing market in England and Wales has a sharp north-south divide, with higher prices and quick sales in London outshining performance in the north.

The firm’s commercial director, David Brown, said: “Even taking inflation into account, the record high price is symbolic of the significant improvement in the housing market over the past year.

“Life for first time buyers is noticeably easier than it was six months ago. An abundance of great mortgage deals are on offer and lenders are more willing to lend to high loan to value borrowers, which has led to a substantial rise in first-time buyer activity.

“Schemes like Help to Buy and Funding for Lending have acted like a steroid injection for the mortgage market and made it markedly stronger than last year.”

London house prices are buoying the rest of the market and make the national average house price look flattering, but, warns the firm, the outlook for the rest of the country is not so good.

“London still leads the way in terms of house price rises with growth in 31 out of 33 London boroughs annually and is the only region in England with average prices above previous record levels,” said Brown.

“The North/South divide is actually becoming more prominent as time goes on and as the London market is more exposed to a wider audience of potential foreign buyers, flocking to the capital.

“Many buyers remain locked out of the market because they can’t afford to meet strict mortgage requirements and save enough for a deposit which is why cash buyers still account for a high proportion of the total number of sales.”