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First-time Buyers

London property prices show record growth

paulajohn
Written By:
Posted:
15/07/2014
Updated:
02/03/2015

The average house price in London grew by more than a fifth in the last year, the latest data released by from the Office for National Statistics has shown.

Property values in the capital grew by 20.1% in the 12 months to May 2014, official statistics show. The ONS described this growth as a ‘record annual increase’.

The hefty price increases in the capital meant the UK-wide growth figure reached 10.5%, up on the 9.9% recorded for the year to April 2014.

Excluding London and the South East, UK house prices increased by 6.4% in the 12 months to May 2014.

On a national basis, house prices showed annual inflation of 11.0% in England, 6.5% in Wales and 3.6% in Scotland.

However property values in Northern Ireland have fallen back, shrinking 0.7%.

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First-time buyer house prices continue to increase faster than the UK average with prices paid 11.3% higher on average than a year ago.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said young buyers still faced major problems getting onto the property ladder.

“With first-time buyers now paying an average of £202,000 to get on the housing ladder, in some ways it’s harder than ever to take that first step,” he said.

“However, lenders have stepped up to the plate with more high loan-to-value products available now than four or five years ago, with family-assisted schemes and offset products, as well as government schemes such as Help to Buy. The important thing is that buyers must be able to afford the mortgage now, as well as in the future.

“While it still looks as though the first rate rise won’t come before the middle of next year at the earliest, fixed-rate mortgages are becoming more expensive, and will continue to do so. However, borrowers shouldn’t panic as five-year fixes are still available for a little over 3% – historically, an excellent rate.”

A separate report by Experian showed the number of high-end properties entering the market had reached the highest level since 2010. Homes over £250,000 accounted for 41% of properties coming to market, up from 37% last year at the same point last year. In addition the level of houses for sale valued over £500,000 rose by 30% over the last 12 months.