‘Sun is shining on homeowners’

Gary Brash of Mortgage Advice Bureau
Gary Brash of Mortgage Advice Bureau

GARY Brash of Mortgage Advice Bureau comments on the latest developments in UK house price growth.

Temperatures have been rising this July. So have house prices. They are rising so fast, in fact, that the property website Rightmove doubled its forecast for the rest of the year to four per cent.

And with Zoopla reporting rising house prices in every part of Britain in the past three months, the housing market is showing more life than it has in years.

The sun is shining for existing homeowners. ‘Second-steppers’ in particular have much to celebrate, as rising house prices could make it easier for them to sell and move up the housing ladder. And it is cheering news for landlords and others who have invested in a property in the hope of eventually selling it off at a profit.

House prices also help boost confidence in the economy as a whole. A study by the consultancy Capital Economics found consumer confidence rose and fell when house prices rose and fell.

Some may find the outlook a little more overcast. Aspiring first-time buyers may worry a house price rise may push properties out of their reach.

House prices in London have not only recovered from the financial shocks of 2008, they have been above the previous 2007 peak for 15 months in a row.

But at £383,930, the average house in London is worth almost four times that of a house in the North East of England. Across the country as a whole, house prices are still only moving upwards at a moderate pace.

And even in areas where houses might be looking more expensive, the size of the deposit a first-time buyer needs to find can only go down.

Launched by the government in April, the Help to Buy equity loan scheme allows first-time buyers to put down a five per cent deposit on a new build home. The government hopes the second part of Help to Buy, a mortgage guarantee scheme, will give homebuyers with a modest deposit even more choice in mortgages.

On top of this, many mortgage lenders are becoming more creative in the products they offer first-time buyers. These include guarantor mortgages, where relatives of the first-time buyer commit to guarantee the mortgage repayments, and mortgages where the lender offers to pay the first-time buyer’s Stamp Duty.

In other words, if first-time buyers approach their mortgage adviser with an open mind, they too can benefit from the green shoots of housing market recovery.

If you would like to speak to an independent mortgage adviser today you can contact Gary by calling 01744 22999 or emailing at garyb@mab.org.uk