House prices shoot up but not the mortgage prospects for first time buyers
Wow. Government figures released this week show that house price inflation has pushed into double figures as prices were 10.1% higher in April than a year ago. This marks the highest figure since October 2007 when the crisis was just starting to bite.
The latest figures show that UK house prices rose by another 0.4% in April with the cost of the average
UK house now standing at £207,516. The price rise was also consistent across the UK with only
Northern Ireland missing out on a yearly price rise in the year to April.
The price rising is great news for sellers in the market but other figures show a more difficult position for buyers.
The Council of Mortgage Lenders (CML) has released figures that show mortgage lending this year has been subdued with the number of loans granted to home buyers falling by 9% in April.
This still represents growth in comparison with a year ago and will have been slightly effected by the Easter holidays. Analysts see the figure as a modest success but a success nonetheless. The repeated concern is that the low mortgage figures show the problems first time buyers are having, especially if they do not have a large deposit. This is effecting the poorest of society the most since richer families usually provide their children with a deposit to help them get their feet on the property ladder.
The percentage of mortgages made to first-time buyers was a mere 35% of the total, which is the lowest figure since September 2007. This suggests that the recovery from the economic crisis has yet to have any effect on the prospects of first time buyers.
The average deposit required of first time buyers is 25% of the value of the house, presenting a serious hurdle to receiving a mortgage.
