Wednesday, January 29, 2014

House Prices Rise 8.8%

Nationwide's House Price Index has shown an increase of 8.8% year-on-year in January, this is the 13th consecutive  monthly rise.
First-time buyers accounted for approximately 44% of all house purchases between July and September.

Robert Gardner, Nationwide's chief economist, is quoted by the Telegraph describing first-time buyers as "the lifeblood of the housing market". However, it is worth remembering that this lifeblood is being pumped by historically low interest rates and the government's Help to Buy scheme.

Approximately 7,500 buyers used the first phase of the Government’s Help to Buy scheme between October and December. Around 90% of these were first-time buyers.

As and when interest rates rise there will be a change in fortunes, irrespective of the government's attempts to manipulate the property market.

As Mr Gardner notes:
"While we do not expect interest rates to rise until mid-2015, borrowers should be prepared for the prospect of interest rates increasing back towards more normal levels."
Being able to buy a property is one thing, being able to afford to continue to live in it and pay the bills is another!

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