The average house price in the UK is now £170,514, according to the Nationwide Building Society – after a year on year rise of 3.5 per cent.
While impressive, it was just short of July’s year on year rise of 3.9 per cent, the most substantial increase in three years.
Month-on-month, August saw a rise of 0.6 per cent, a little lower than July’s increase of 0.9 per cent on June.
Quarter-on-quarter comparison showed that prices rose by 1.4 per cent in the three months to August.
While many first time buyers and property investors are keen to take advantage of improved lending conditions, there have been warnings that house price rises are not sustainable, most notably from the Governor of the Bank of England, Mark Carney. Mr Carney has concerns that Government stimulus packages – such as Funding for Lending – may create a housing bubble.
The Governor said the Bank of England was “acutely aware” of the potential risks, and would take action on mortgage lending if required.
The Bank might cool the property market in a number of ways. It may ask banks to draw up more restrictive terms of borrowing, or it may demand that banks have more cash on their balance sheets.
Despite concerns, Help to Buy and Funding for Lending are helping many first time buyers on to the property ladder, according to the Council of Mortgage Lenders; 45 per cent of borrowers are obtaining a mortgage for the first time.
Perhaps you’re one of our landlord or let property insurance customers. Are you taking advantage of improved lending conditions, or do you believe house prices are being stoked too high? Let us know your comments below.
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