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House prices reach record high

Joanna Faith
Written By:
Joanna Faith

House prices in England and Wales reached record highs in July, powered by demand in London and government schemes, a report has found.

Prices increased by £5,796 in the past 12 months, reaching a high of £232,969 and beating the previous peak in 2008, according to LSL Property Services.

Mortgage lending in May was up by a fifth compared with April and 17% stronger than a year ago.

The improvement continues to be powered by the strong performance in the capital, where prices are rising by 7.1%, far faster than other parts of the country.

David Newnes, director of LSL Property Services, said: “Typically the property market flourishes in the summer, and July sales are the highest so far this year. But the improvement is more than just a seasonal trend.

“The market is palpably stronger than a year ago and confidence is returning to lenders and buyers.

“The Funding for Lending scheme can take plenty of credit as can Help to Buy.”

Despite the overall improvement in the market, the level of first-time buyer activity is still around half a fraction of what might be considered normal levels.

“Both the lack of housing supply and rising competition in the property market are supporting prices, but at the same time making it more difficult for first-time buyers. The Government urgently needs to address housing supply if it is serious about boosting home ownership levels,” said Newnes.