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Homebuyers face ‘jumping through hoops’ as house prices rocket

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Prospective homebuyers have been warned to expect having to jump through hoops in order to secure their dream properties, as new figures show house prices have jumped substantially over the last 12 months.

House prices across the UK grew 10.2% in the year to March 2021, the Office for National Statistics (ONS) said.

The rate of growth was the highest since August 2007, with an acceleration having started in H2 2020 and then continuing into this year.

The increase month-on-month was 2.1% from February to March 2021, compared to 0.8% for January to February.

Price growth was strongest for detached properties, at 11.7%. For a flat or maisonette it was 5%.

The average price of a home hit £256,000 in March, up from £232,000 in the same month last year — for England, Wales, Scotland and Northern Ireland.

In each of the four countries of the UK, average prices reached record levels.

For England, prices grew 10.2% to £275,000. In Wales, they were up 11% to £185,000. 

Scotland saw growth of 10.6% to £167,00. While in Northern Ireland, prices were up 6% to £149,000.

Yorkshire and the Humber recorded the highest growth for a region at 14%, and the lowest was in London at 3.7%.

Positive and challenging

The mortgage sector interpreted the price growth as positive.

“This confidence in the market is hugely positive. However, with property prices continuing to increase, those trying to get on the ladder are going to struggle,” said Gareth Lewis, commercial director at lender MT Finance.

He added: “Government has a responsibility to make property more affordable.”

At Aldermore, head of mortgage distribution, Jon Cooper, said: “House price rises often indicate the health of the wider economy, so this is a positive sign for the UK’s recovery.”

He added: “We’re seeing a shift in preference as buyers seek more space and access to nature.”

Simon Furnell, chief operating office at Masthaven Bank, also noted, “the race for space,” in rural and suburban areas. 

But Furnell added: “It’s important that the sector and house buyers prepare for possible volatility once the stamp duty holiday deadline passes on 30 June,” — with specialist lenders having a role to play.

House price rises to continue

On the regional picture, Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “With prices in Yorkshire and the Humber continuing to outpace London – as people no longer have to be in the capital as much as before – one hopes we end up with a more balanced housing market across the country.

Harris added: “Lenders have plenty of cash. . .  and it’s hard to see interest rates rising any time soon, which is good news for borrowers. But the impact of the pandemic means that some, such as the self-employed, still have to jump through hoops when it comes to getting a mortgage.”

Taking the wider investor’s perspective, SPI Capital chief executive, Anna Clare Harper, said: “The rise and rise of house prices is something we have become accustomed to. . . With construction costs rising, it’s easy to see how house price rises will continue over the coming years.”

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