House prices to rise AGAIN with an extra £10,000 boom in the New Year
HOUSE prices are set to soar again after figures suggested the cost of an average property is expected to rise by £10,000 next year.
By: Sarah O'Grady
London has seen a shocking 18 per cent growth in the average housing market price
October saw a 1.2 per cent rise in prices, putting the cost of an average home at £204,247. And experts expect a five per cent rise in 2015.
Overall prices have risen 6.8 per cent this year, but London has seen a staggering 18 per cent growth.
A seven per cent jump in values predicted in the capital would put the average price of a home at £536,000, according to estate agents Haart.
Across the country, the agency had 10 buyers for each new property – and 17 in London. Values of first-time buyer homes are up 8.1 per cent a year.
Paul Smith, chief executive of Haart, said: “All signals are pointing to more price rises, which we think will be up to five per cent across the UK next year.
“Savvy buyers and sellers would be wise to run with the window of opportunity that this creates now.
“Supply of homes is the biggest issue affecting prices and until this is properly addressed, prices will continue to rise.”
The forecast was backed by consumer confidence data from Lloyds Bank.
Its Spending Power Report for October found consumer confidence had climbed five points to 151 – the second highest it has recorded.
Patrick Foley, Lloyds chief economist, said: “Consumers remain in a positive mood.
“Though risks around the economic outlook have risen somewhat, emerging signs of a modest strengthening in real wage growth should help support the UK recovery.”
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There are around 17 buyers in the market for each new property in London - 10 nationally
All signals are pointing to more price rises
Paul Smith, chief executive of Haart
Property experts say the housing market has navigated over hurdles such as the Mortgage Market Review, which led to the introduction of tougher lending rules and the threat of imminent interest rate rises.
The effects of the review, launched in April, have not hit would-be buyers as hard as originally feared.
Although there was some confusion among lenders and grumbles from borrowers, who must sit through longer financial interviews, the rules are now established.
Doubts over the strength of the economic recovery and falling inflation means a potential rise in the base rate of 0.5 per cent has been put on the back-burner. Many economists say interest rates will not rise until 2016 and mortgage lenders are now fighting for business by offering some record low home loan deals.
At the beginning of the month, estate agent Savills tipped London to post house price growth over the next five years of 10.2 per cent and 19.3 per cent across Britain.
The Halifax said values in the three months to October were 0.8 per cent higher than in the previous quarter. Typical house prices overtook their 2007 peak in cash terms in May. It said values this month are 8.8 per cent higher across the country than they were a year ago.
Analysts Hometrack found the housing boom had now spread to every major city.
Britain’s top 20 cities are all now experiencing annual house price growth of five per cent or more for the first time in a decade.