Statistics have revealed that house prices in England is on their highest level for five years as revealed on this article by Iona Bain of FT Adviser on September 18th, 2013.
The house price index for England, released by the Office for
National Statistics on Tuesday, shot up to 182.4 in July, a 0.9 per cent
increase on the previous peak in January 2008.
The index for the whole country rose by 3.3 per cent, compared to the 3.1 increase in the 12 months up to June 2013.
However this overall figure masked major variations in places
such as Scotland, where house prices fell by 2 per cent, and in Wales,
where the drop was smaller at 0.7 per cent.
The rise in
England’s house price index was mainly driven by a 9.7 per cent increase
in London, the only place in the UK where property values have outpaced
inflation.
The southeast and East Midlands, which saw
property price rises of 2.6 per cent and 2.4 per cent respectively, also
contributed to the new high.
If the southeast and London
were omitted from the statistics then the overall rise in prices would
be 0.8 per cent, the ONS stated.
Last week the Royal
Institute of Chartered Surveyors called for the Bank of England to
impose a cap, or ‘speed bump’, on house price inflation.
The southeast and East Midlands, which saw property price rises
of 2.6 per cent and 2.4 per cent respectively, also contributed to the
new high.
If the southeast and London were omitted from the
statistics then the overall rise in prices would be 0.8 per cent, the
ONS stated.
Last week the Royal Institute of Chartered
Surveyors called for the Bank of England to impose a cap, or ‘speed
bump’, on house price inflation.
But Steve Davies, co-manager of the Jupiter UK Growth Fund, described the suggestion as “unworkable”.
He
said: “We believe the FPC is most likely to consider a cap on
loan-to-value ratios. Nobody wants to go back to the days of 110 per
cent LTV mortgages that were being issued by providers like Northern
Rock before the financial crisis. Perhaps we will see an explicit ban on
LTV mortgages of 95 per cent or more.”
Industry figures
have also called for more housebuilding to dilute a potential bubble.
David Brown, commercial director of LSL Property Services, said: “Having
enough houses to go round is the only real way to keep prices from
spiralling too far and will be vital in creating a sustainable housing
market that is accessible to all.”
Research published by
the Building Societies Association this week showed that only 2 per cent
of the British public believed the housing market was in danger of
“overheating”, with just 7 per cent of Londoners sharing this concern.
One-fifth of consumers said the market was in recovery mode, while a similar number described it as stable.
Claire
Walsh, IFA for East Sussex-based Pavilion Financial Planning, said:
“The problem is simply that there isn’t enough housing out there, and
demand will keep going up and outstripping supply if the government does
not take action.”
People also flock to London for their careers, with huge pressure on rental and housing stock.
“By
contrast, I would make a loss if I were to sell a property I own in
Dundee, given that I bought it in 2007 when the market was peaking.”
Article Source: http://www.ftadviser.com/2013/09/18/mortgages/mortgage-data/house-prices-soar-to-highest-for-five-years-a8Zhc9Z1qawYRhmabQVicP/article.html
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