UK house prices rose by 7.7% in November this year as the demand for homes increased. Halifax recorded it as the biggest leap in 6 years, with low mortgage rates and the Help to Buy scheme enticing house buyers. With prices up by 1.1% in November. this is an average house sale price of £174,910 whilst the 3 month grown figures hit 2.1%.
Halifax obtains their figures from mortgages that have been approved during the month and as they are one of the first mortgage lenders to take the taxpayer backed guarantee on 95% Help to Buy mortgages, figures will also include these buyers. Annual figures are based on a 3 month comparison on the same period of the previous year. A year on year comparison it at an annual growth rate of 8.4%.
The Bank of England have commented that they are looking to refocus the Funding for Lending scheme which allowed banks and building societies to offer cheaper mortgages to push the money towards business lending. This move will come in to effect in 2014 but could lead to increased mortgage rates, although brokers are predicting that with the current competition in the market it could also prevent any big leaps in costs.
With growing pressures on many households the Halifax figures do show that house prices are rising but household incomes are stagnant. The average property price is estimated to be now nearly 5 times more than the average income of a full time male which is nearly 4 times more than in November 2012.
There are also signs of a housebuilding revival which could help to bring he demand for housing down and give a better balance of pricing. The Autumn Statement from Thursday 5th December did contain details of a £1bn loan fund to unblock large housing developments around the UK, which would help to meet the housing demand.