Booming housing market could see Help to Buy scaled back
UK house prices continued their forward march at the end of 2013, with the capital pulling even further ahead from the pack and the average house price hitting £250,000.
Figures from the Office for National Statistics have shown London house prices rose 0.9 per cent in December, putting them more than a fifth higher than at pre-crisis peak. Annually, house prices went up at more than double the UK average, rising 12.3 per cent.
The figures probably won't do a lot to alleviate fears of a house price bubble, particularly when it comes to the capital.
IHS Global Insight has warned that soaring house prices present a "very real danger" – particularly if an already-improving market is buoyed markedly by Help to Buy.
As far as it's concerned, Mark Carney will take further steps this year to dampen the booming market, possibly recommending the government's Help to Buy scheme be diluted to apply only to houses £300,000 and under.
Source: ONS
Outside London
Country-wide prices grew by 5.5 per cent in the last month of 2013, compared with a year earlier. Although a six per cent increase had been expected, limited supply is still pushing prices up nationwide.
Excluding London and South East, prices rose 3.1 per cent in the 12 months to December.
The average house price reached £250,000 at the end of 2013, meaning buyers having to fork out seven per cent more than a year earlier. This confirmed figures from Rightmove yesterday, which showed averages have gone past the three per cent stamp duty threshold of £250,000.
In December, the number of first-time buyers was 7.4 per cent higher than a year earlier.
Source: ONS
IHS Global Insight expect house prices to increase by around eight per cent in 2014 with gains across the country. It warns, however, that even this could prove a conservative forecast.