The average price of a house in the UK has shot up by more than £20,000 since the start of 2013, sending the average cost of a home to £249,000.
The surge in property prices, up by 9.1%, represents the strongest start to the year since 2004, and while this is good news for those who are selling their home, it could make the dream of home ownership even more out of reach for would-be buyers.
The figures from Rightmove also reveal that the capital is continuing to be a key driver for property price growth, with house prices in London rising by £16,000 (3.3%) in just a month to a record £509,000.
In London the increase in property prices has been most marked in Camden (up 7.2% in a month to reach £1.05m), Brent (up 5.9% to £732,000) and Lambeth (up 5.6% to £529,000). “Despite a new national record, it’s not ‘green shoots of recovery’ across the board, especially for the deposit-strapped mass market,” said Miles Shipside, of Rightmove. “They must wait patiently until January, when the Help to Buy scheme extends to the resale market, unless new homes developers can increase building dramatically this year.”
In the rest of the UK the north of England (up £6,182, or 4.2%) led the way for the growth in property prices followed by East Anglia (up £8,909, or 4%). The recent report by former Bank of England economists argues that the Help to Buy scheme, which offers all buyers the chance to snap up a new build home with a 5% deposit and a 20% equity loan from the government, could see the cost of a home soar by 30% by 2015.
The economists from Fathom Consulting argue that it is the very fact that few people can afford to become homeowners that is ‘keeping a lid’ on the average house price, which currently stands at a figure of £233,000.
As the Help to Buy scheme could makes the prospect of owning a home more achievable for those in the UK it could act to ‘re-ignite the housing market bubble’, according to the report.