The Office of National Statistics (ONS) reveal that London house prices leads the UK property market to record highs in July.
ONS data shows London house prices are up 19.3% year on year with UK house prices up 10.2% in July, which is a slight reduction on the figures recorded of 10.4% in May.
During the month average house prices for the UK increased by 0.5% to £265,000 whereas the value in London is now £499,000, fractionally below the 4% stamp duty level of £500,000.
Taking London out of the data house prices in the South East increased by 6.3%.
Rising house prices in London allows the equity release buyer to access money with a lifetime mortgage and use this to consolidate debt, buy a more expensive home or pay university fees for grandchildren.
Mortgage lending at a high
According to the Council of Mortgage Lenders (CML) mortgage lending for July was a value of £19.1 billion, the highest amount since August 2008 and includes first time buyers, home movers, remortgage buyers and buy-to-let landlords.
The latest figure is 7% higher than last month of £17.9 million and 15% higher than June 2013 of £16.7 billion.
The number of property transactions for the first six months of the year has increased by 25% compared to the same period last year.
However, new mortgage rules with tougher affordability checks have made it more difficult for first time buyers and owner-occupier remortgage buyers to secure loans.
Even so, the number of first time buyers was 12% higher in June 2014 than a year ago with an average house price of £204,000. This is the biggest rise since 2010.
For older equity release buyers, fixed rates of 5.9% upwards can be secure for a lifetime mortgage without any evidence of earnings which is important for borrowers with only pension income.
London house prices leading the way
House prices in London have remained strong while local markets outside the capital such as North West England and the Humber regions remain weak.
The ONS figures for July 2014 across the country are as follows:
| Area | Change | Value |
|---|---|---|
| London | 19.3% | £499,176 |
| South East | 9.7% | £326,023 |
| England | 10.7% | £276,312 |
| East | 7.9% | £273,591 |
| UK | 10.2% | £264,889 |
| South West | 9.7% | £240,509 |
| West Midlands | 5.4% | £193,621 |
| Scotland | 6.0% | £193,059 |
| East Midlands | 7.2% | £182,989 |
| Yorks and the Humber | 6.0% | £173,299 |
| North West | 6.2% | £171,003 |
| Wales | 3.5% | £166,966 |
| North East | 4.4% | £150,032 |
| Northern Ireland | 4.9% | £137,160 |
Data from the ONS shows London with an average house price of £499,176 ahead of the UK average of £264,889 and the lowest is Northern Ireland at £137,160.
The South East has seen growth in house prices increase from 9.4% year on year to May to 9.7% in June. In contrast for Wales the annual growth rate has slowed from 6.5% to only 3.5% in June.
What are your next steps?
Talk to our London City Mortgage advisers if you are an older homeowner releasing equity from your property, we can recommend the lifetime mortgage to access wealth for home or garden improvements and holidays.
At LCM our mortgage brokers can provide advice if you are a first time buyer, moving home, want to remortgage your existing home to a new cost effective mortgage deal or are a buy-to-let investor.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the equity release mortgage calculator, property value tracker chart and mortgage cost calculator.
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.
