Leading mortgage lender the Halifax has released data showing house prices have increased by the biggest annual amount since September 2007.

The new data from the Halifax shows a 10.2% rise in house prices over the last year to July with the average property increasing by £17,000 and are now valued at £186,322, the highest since April 2008.

For remortgage buyers higher prices give them an opportunity to release capital which they can use to improve their home such as a new kitchen, bathroom or extension.

There has been a significant rise in the last three months from May to July of 3.6% compared to the previous period from February to April.

In the last month prices are 1.4% higher according to the Halifax, adding £2,400 to the average price compared to the previous month where prices reduced by 0.4%.

Homeowners want to sell

A survey by the Halifax shows that 60% of homeowners believe they should sell in the next year as now is a good time. This is the highest figure they have recorded since the survey was started three years ago.

In particular this tends is strongest with people in central London wanting to cash in and move to the suburbs. The increase in price is due to low supply against increasing demand and low lender mortgage rates.

For home movers leaving areas with high property values to areas with lower values, will have extra equity for a deposit to buy a larger home or can reduce their mortgage.

There is evidence that the rise in prices is slowing as the Land Registry has shown that seven out of ten regions in England and Wales have experienced falling prices.

Rise in house prices is slowing

According to the Nationwide house prices increased by 10.6% in July which is lower than the figure for June at 11.8% year on year. In contrast to the Halifax, prices increased by only 0.1% in the last month.

Higher property values for older homeowners allows the equity release mortgage buyer to access wealth to improve your quality of life, repay an interest only mortgage or even reduce inheritance tax owed by your beneficiaries.

Recent changes in mortgage rules could be the cause of a slowing housing market. The mortgage market review (MMR) has made it more difficult to secure a mortgage by first time buyers, home movers or remortgage buyers.

Lenders must take into account income and outgoings such as child care, holidays and living costs. This does not apply to buy-to-let landlords as lenders require higher deposits and rental income to exceed 125% of mortgage interest.

In addition the Bank of England has been more aggressive about the need to take action to limit the growth in house prices, such as introducing a mortgage cap of 4.5 times income to only 15% of all mortgages approvals.

The Bank also has suggested that a rise in interest rates was likely making lenders more cautious and increasing the cost of fixed rate mortgages.

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 calculator, mortgage monthly 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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