House prices rise at fastest rate since 2007, new figures show

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Latest figures show house prices rose by an average of house prices up 5.2 per cent, and the £11,920 rise is the highest yearly increase since 2007.

Average prices rose £1,489 in December alone to £240,134, a new record for England & Wales

David Newnes, director of LSL Property Services which owns Your Move and Reeds Rains estate agents, said: “As we step into 2014, the recovery of the property market shows no sign of slowing down, with buyer demand growing swiftly and competition rising.

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“Average prices reached a new record high in December after a yearly increase of £11,920, the highest since 2007, along with a monthly increase of £1,489.

“Without doubt, the market is moving full steam ahead towards widespread recovery. However, we’re certainly not in the bubble zone here, with price growth and sales both still some way off their pre-crisis peaks.

“Momentum is sweeping across the board with new record-high house prices in areas beyond the capital, ranging from the West Midlands to East Anglia.

“Attention is moving away from the north-south divide and other regions are stepping out of the shadow of London’s more buoyant property market. Now the universal recovery is really taking hold. For the fourth successive month, all ten regions in England & Wales witnessed positive price rises over the past twelve months.

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“The coming year looks bright for the UK market, thanks to the government’s schemes and record low interest rates.

Cheaper mortgages, along with an easing of availability of high LTV mortgages and wider product choices to consumers, have made life drastically easier for new buyers looking to get a foot on the property ladder.

“The rise in prices is matched by an impressive boost in sales with a 34% increase in sales since December 2012, which is keeping confidence levels up. There are scores of first-time buyers moving towards the market at lightning pace to explore the raft of attractive mortgage deals on offer.

“Record low mortgage rates - combined with the boost in activity from first-time buyers at the bottom end of the market - have unlocked chains further up.

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The rise in activity among second steppers in recent months, along with 16 per cent of home movers taking out mortgages compared to a year ago, suggests sales growth will continue at a healthy pace.

“On closer inspection by region, East Anglia and the North West saw the greatest rise in sales over the past year, over 26 per cent, but London ranked as the third lowest, despite being the area with the largest rise in prices.

“This shows the underlying issue that many first-time buyers are unable to afford to live in the capital, as properties are moving into a league of their own.

“This is not helped by growing demand from both domestic and overseas buyers left unmatched due to the gross dearth of housing supply in London.

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“The ending of the Funding for Lending scheme, and the arrival of the new mortgage market rules in April, might have a slowing effect further into 2014.

“However the Help to Buy scheme will become even more pivotal in the coming months and the government’s ability to stimulate housing development will be crucial in addressing the chronic shortage of housing supply.”