First-time buyers paid 4.1% more for their properties in May 2013 compared to the previous year against a backdrop of rising house prices, the Office for National Statistics has revealed. Existing owners also paid on average 2.5% more for new homes than they did in May 2012. Across the UK house prices rose by 2.9% in the twelve months to May.
LSL Property Services commercial director David Brown said: “Strong price growth in May is another encouraging sign for the economy and the housing market in general. But that’s not the whole picture. Equally, it’s tougher news for anyone struggling to raise their first deposit. House prices are accelerating away from first-time buyers 60% faster than they’re lifting the finances of existing owners. First-time buyers are still facing a three-pronged attack from encroaching inflation, weak wage growth, and paltry savings rates.”
May saw house prices rise across the UK, with year-on-year growth of 3.1% in England, 0.8% in Scotland, 0.6% in Wales and 1.9% in Northern Ireland. This was the first time Northern Ireland experienced a year-on-year house price rise since February 2008. Annual house price increases in England were driven by a 6.6% rise in London and a 2.7% increase in both the North West and West Midlands.
Garrington property search consultants managing director Jonathan Hopper said the housing market needed steady and sustained growth: “The worry is that with demand outstripping good quality supply, house prices might gather momentum. The last thing we want to see is a return to the unsustainable days of double digit growth. Yes, the property market is in a much healthier state, and initiatives like the Funding for Lending Scheme have played a key role in this. But the market is not out of the woods yet.”
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