Property costs rose by 1.5% in England and Wales during September meaning that the average property price in these areas has risen to a sizeable £167.063.
September’s results continue the general trend displayed in property prices this year, with an average increase of 3.4% in house costs in England. Furthermore, the Land Registry disclosed that the number of sales being made has also increase by over 15% this summer, rising to an average of around 62,000 a month during the season, compared to around 54,000 last year.
However, the prices in Wales have actually fallen by almost 2% this year, and continued this trend on in November.
The value of the study however is diminished by the fact that it did not consider new-build homes or ones that have been sold on the property market in the last 18 years. Nevertheless, they still indicate a clear trend in the direction that property prices are going, and have clearly illustrated that this is an occurrence that is set to continue.
The rise in property prices has been attributed by most to the governments Help to Buy initiative that has increased the demand for property by making it easier to afford a house.
The scheme has encouraged mortgage lenders to offer applicants a 5% deposit deal in which they are only required to pay that amount as a deposit to acquire the property. Following this, the government initiated another phase of the scheme which required all lenders on board to offer high loan to value mortgages with the assurance that the government will guarantee 15% of applicant’s mortgage payments. It is thought this has allowed providers to offer 95% loan to value mortgages, meaning people’s capacity to acquire a home is easier than ever.
It is thought though that the price rises will fuel critics of the initiative who have raised concerns about the schemes potential to cause a housing ‘bubble’. The rising prices of property following the implementation of the second phase of the scheme will no doubt be pounced on as a clear representation that it is ‘artificially’ inflating the value of property in the UK.
The statistics have indicated that the North East of England witnessed the sharpest increase in property prices in the past month, rising by 2.7%, whilst London has seen a 1.9% rise in the past month.
However the annual rise in London was far greater than its Northern counterpart with London seeing a 9.2% increase this year whilst the North East only saw a 2.7%. This means that the average price of a property in London is now even greater than elsewhere in the country, with the £393,662 average in the capital vastly higher.
Howard Archer, chief UK economist at IHS Global Insight, said: “The Land Registry data add to widespread evidence that housing market activity was already improving markedly and prices strengthening even before the Help to Buy mortgage guarantee scheme came into being in early October.
“There is a mounting danger that house prices could really take off over the coming months, especially if already significantly improving housing market activity and rising buyer interest is lifted appreciably further by the Help to Buy mortgage guarantee scheme which will take full effect in January.