The CEBR expects house prices to rise as Bank of England reveals mortgage approvals are higher.
News today reported in the Telegraph and Guardian quotes a Centre for Economic and Business Research (CEBR) and anticipates price rises in residential housing of 2.9% before the end of the year.
This will increase the price of the average house in the UK to £225,000 by the end of 2013. Further house price rises are expected in 2014 with price rises expected of up to 3.9%.
The CEBR expect these rises to continue over the next 5 years and they estimate that rises could be as much as 23.7% between now and 2018.
This would make the price of the average house £278,000 by 2018. In London, prices rises will be even greater.
Demand rising for mortgages
Bank of England figures suggest that mortgage approvals first time buyers and re-mortgages are increasing as approvals in Augusts were the highest since February 2008.
The Help to Buy scheme has encouraged this growth but critics argue that this could a ‘bubble’, stating that many houses are already ‘unaffordable’ based on current salary levels.
Higher property values in the next five years will benefit existing homeowners such as remortgage buyers as they have the opportunity to release capital which they can use to add an extension or new kitchen.
Older homeowners with considerable value in their property offers the equity release buyer access to cash using a lifetime mortgage to pay university fees for grandchildren, holidays of a lifetime or pay for care at home.
London leads the market
In London however there appear to be constant demand for housing as it is continues to be in short supply and people continue to want to live in the capital.
The continued rise in house prices means first time buyers would require a higher deposit, larger mortgage or higher earnings to purchase their first home.
The Nationwide also saw house prices running at 5% outside of London and 10% inside London.
They say that in three of the London Boroughs, Islington, Westminster and Hackney, prices have doubled since 2003.
For home movers leaving areas with high property values to areas with lower growth, gives them additional equity for a deposit to buy a larger home or reduce their mortgage.
What are your next steps?
Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.
Learn more by using the equity release mortgage calculator, mortgage cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.
For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to maintain your lifestyle or even give to a family member.
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