by Mark Johnston
House Prices Rise for First Time Buyers.
It appears that recently several housing market studies have been reporting improvements in the housing market in recent months following the launch of the governments funding for lending scheme.
Industry figures have shown that around 216,200 first time buyers bought their first home in 2012 which was more than there has been since the peak of the property boom back in 2007.
The Council of Mortgage Lenders (CML) figures show that the year on year lending to first time buyers was up by around 14 per cent at the end of 2012.
At the end of 2012, Martin Ellis, housing economist at Halifax, said “overall, we expect to see a modest increase in UK house prices during 2013”.
New research has shown that the government schemes, which have been aimed at encouraging lending, are now beginning to filter through in to both the property and mortgage markets. However, it does seem though that these schemes are pushing up property prices, particularly for those trying to get their feet on to the property ladder.
According to data which was collected by the Halifax, the average price paid for a home by first time buyers rose 2.7 per cent just last month, thus taking the average price to around £125,799.
These figures also mean that the average price paid by first time buyers now stands more than 5 per cent higher than in September last year.
It appears then that house prices are therefore moving against first time buyers.
Some experts feel that theses price rises may possibly have something to do with opportunity presented by the current running schemes such as ‘FirstBuy’ and also ‘NewBuy’.
In the recent budget, Chancellor George Osborne, announced another plan by the government to help the property market. This comes in the form of a ‘help to buy’ scheme which is aimed at making new build properties in particular more affordable.
However, the Royal Institution of Chartered Surveyors (RICS) has warned that the scheme may just merely serve to push up prices on new builds to the benefit of house builders.
Simon Rubinsohn, a chief economist, suggested that “it may be a coincidence but it is interesting that house builders appear to be pushing up new house prices by around 5 per cent at the present time while the existing market is showing a flatter trend in prices”.
Some industry experts feel that this new government policy is to force up house prices by ‘hook or crook’ as it makes Britons feel wealthier and therefore encourages spending. Also sharp falls in house prices would mean disaster for the UK’s already fragile banking sector.
This resurgence help does go some way in to explaining why the prices paid by first time buyers are suddenly rising so fast.
All this said, Andrew Oxlade, personal finance editor at the Telegraph, suggests that “would be buyers should realise that house prices are again getting vastly overpriced and the government is determined to push them further”.
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