UK house prices rise at 1.6% for the month, says Halifax
Data from the Halifax shows UK house prices increased by 1.6% last month and by 8.5% over the last year.
The Halifax report shows the price of an average house has increased by 1.6% to £196,412 and is now 8.5% up on last years average price of £176,790.
According to Martin Ellis, housing economist at the Halifax, house prices are increasing more quickly than average earnings despite the return to real earnings growth over the past few months.
The continued rise in house prices faster than earnings means first time buyers would require a higher deposit, larger mortgage or higher earnings to purchase their first home.
This means buying a property less attainable for first time buyers and more difficult for home movers. Even buy-to-let landlords would require a larger deposit and mortgage to buy and higher rental income to cover the interest costs.
Property market expects to pick up
Over the last three months to April 2015 house prices increased 2.2% higher than the preceding three months to January.The quarterly change has decreased for the first time this year compared to 2.6% last month. Even so house price growth is forecast to end the year at 3-5%.
The annual house price rise for April is 8.5% and this is higher than the 8.1% annual rate for March.
One advantage of rising house prices for homeowners is remortgage buyers can now release equity for home improvements.
The figure remains within a narrow range of 8-9% for the past 7 months except for December when it was 7.9%. The range remains below the recent peak of 10.2% reached in July 2014.
Supply remains very tight
Home sales remain unchanged at 101,000 in March and have been static for the past year but remain 6% lower than the first quarter of 2014.There remains a very tight supply of properties coming to the market which has helped to keep growth in a narrow range.
With fewer suitable homes on the market as the equity release mortgage buyer can avoid downsizing to access wealth from their home to repay an interest only mortgage, pay for care at home or gift to a family member.
Howard Archer, chief economist at IHS Global Insight, has said the housing market is now turning around gradually after losing momentum since the 2014 peak levels.
He said housing market growth would be supported by the stamp duty reform, low mortgage rates, rising employment and higher consumer confidence.
However, first time buyers and home movers will be constrained by stretching house price to income ratios and tougher affordability checks from lenders.
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.
Learn more by using the equity release calculator, property value tracker chart and mortgage cost calculator. Start with a free mortgage quote or call us and we can take your details.
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.
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These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.
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