House prices have increased by £4k
02-07-2015
House prices have increased by £4k after receiving a triple boost
ALMOST £4,000 was added to house prices last month thanks to a hat-trick of cheap mortgage deals, a cut in stamp duty bills and salary increases.
By Sarah O'Grady
House prices increase GETTY
The £3,800 bounce – in a month when the property market would normally slow down – pushed the cost of a typical home to £193,130, according to Britain’s biggest mortgage lender.
The two per cent jump was the strongest monthly rise since 2009.
The year-on-year increase of 8.5 per cent – up from 7.8 per cent in December – showed the booming health of the property market.
The Halifax predicts property prices will soar by another five per cent this year after interest rates were kept at their historic low of 0.5 per cent yesterday.
The Bank of England’s latest decision means Britain has seen six years of rates at their current level, since they were slashed in March 2009.
Rob Weaver, director of investments at the Property Partner website, said: “A strong January and the first quarterly rise for six months suggests another buoyant year and it’s hard to see how the property market could under-perform in 2015.
“Economic conditions remain stable, employment is up, interest rates are low and the cost of living has fallen sharply.
“The impact of the simplified stamp duty regime is being felt and house prices are no longer being distorted by the old thresholds as borrowers continue to take advantage of cheap mortgage rates.”
The rise in optimism continued after a survey of business leaders by accountants Deloitte forecast last month that wages would rise 2.9 per cent this year, well ahead of an expected Consumer Price Index inflation rate of 1.3 per cent.
A strong January and the first quarterly rise for six months suggests another buoyant year and it’s hard to see how the property market could under-perform in 2015
Rob Weaver, director of investments at the Property Partner website
Lenders have been slashing their mortgage rates as they compete for business. Barclays is offering its lowest ever five-year fixed rate at 2.29 per cent and Virgin Money has a five-year deal pegged at 2.24 per cent.
Halifax said annual price growth remained below last July’s peak of 10.2 per cent when the lender was predicting a higher increase in values this year of eight per cent.
But Alex Gosling, CEO of online estate agents HouseSimple, described the rally in values as confirmation that the housing market was “pausing for thought”, rather than petering out.