House prices in the UK were increased by 6.8 per cent in the year to January 2014, posing questions of affordability for consumers.
The figures were released by the Office of National Statistics (ONS) and also showed a monthly increase in prices of 5.5 per cent.
England saw the greatest rises in prices in the UK, up 7.1 per cent, while houses in Wales now cost 6.9 per cent more and 2.7 per cent more in Northern Ireland. Prices in Scotland saw the smallest increase of 2.7 per cent.
Commenting on the figures, Alan Cleary, managing director of Precise Mortgages said, that while an increase in house prices was a positive sign for the market, it would have a further impact on affordability for prospective house buyers.
“The impact of January price rises will be felt most acutely by first time buyers so it begs the question, what more we can do as an industry to help those looking to make their first step on the property ladder?” Cleary asks.
“We know that first buyers in the UK are often hit twice: they are facing the highest price increases and, for some, they also face challenges to satisfy the criteria of main stream lenders. As well as the affordably question, potential credit worthy buyers who are unable to gain access to mortgages for their first properties could also be making up this gap. The industry recognises that first-time buyers play a vital role in stimulating the housing market – they are the ones driving a significant amount of the increased activity in the mortgage arena. That’s why it’s important that as an industry we cater to all credit worthy potential buyers and help those looking to become home owners for the first time where we can.”
Meanwhile, Richard Sexton, director of e.surv chartered surveyors, credited Help to Buy for the recovery of the industry.
“The housing market is sparking with energy. Prices have increased in every region of the UK ignited by a renewed confidence in the economy”, said Sexton.
“Buyers are taking advantage of low rates on offer to get on the housing ladder. And more buyers are choosing to buy now in anticipation of further price rises in the imminent future.
“Help to Buy is propelling many people who would have been left renting onto the housing ladder, meaning first-time buyers are at the forefront of the recovery.
“It has allowed more lending to borrowers with smaller deposits and this has eased the struggle to save while interest rates – and wages – remain low.
“High LTV (loan to value) lending still has some ground to make up; it is still a quarter behind what it was in 2008. But the extension of Help to Buy 1 announced in the Budget will see first-time buyers supported until the end of the decade. If this comes hand-in-hand with more home-building, the number of first-time buyers will continue climbing for the foreseeable future.”
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