Mark Carney, the Governor the Bank of England played down a possible housing bubble.

He stated that the housing market was simply playing catch up after a significant downturn and that price rises were not a threat to financial stability.

"We've had acceleration from quite a low level. Any time we see a sharp increase in credit growth we take an interest. We do have to put in some context though that it is still running below historic averages."

Mortgage transactions still lower

Carney said that mortgage approvals and transactions for first time buyers, home movers, remortgage buyers and buy-to-let landlords were still only at three - quarters of the level seen before the crisis.

The Bank expected "a continuation of current momentum" for 2014 and will continue to monitor the Help to Buy scheme.

It has stresses that the scheme will have relatively little impact given the size of the mortgage market.

House prices fall in December 2013

According to the Halifax house prices were down 0.6% in December even though the number of house transactions is expected to exceed one million during the year, the highest since 2007.

For last year UK prices have increased by 7.5% and the growing confidence in the UK economy is likely to increase demand in the housing market and they have predicted prices to continue to rise.

Home movers wanting to trade up when prices are rising will find their next property is more expensive which means they need a larger deposit or mortgage.

The Bank of England has also reported that the supply of mortgages has increased with lenders offering higher loan to values borrowing 75% or even 90% of the property value.

These loan to values do not apple to the equity release buyer as a lifetime mortgage can be secured on a fixed rate without any evidence of earnings, important for borrowers with only pension income.

In part this has been due to Help to Buy requiring first time buyers to have only a 5% deposit with the government providing an interest free loan of 15% and the balance of 80% being a mortgage.

What are your next steps?

Speak to our LCM mortgage advisers if you are planning to move home, buying your first home, remortgaging your existing home to a new cost effective mortgage deal or are a buy-to-let investor.

For equity release buyers our London City Mortgage brokers can recommend lifetime mortgages allowing you to receive cash from your property to help maintain your standard of living as costs rise or help your children start or expand a business.

Learn more by using the mortgage monthly cost calculators, equity release calculator and property value tracker chart Start with a free mortgage quote or call us and we can take your details.

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