House prices went up 1.3% in September, increasing the annual rate of inflation to 8.2%, the fastest since February 2005.
The housing market has experienced an upward curve since July.
The average house price is presently £169,413, £13,000 more than September 2006. This equates to a rise of £35 each day over the last 12 months.
Strong housing demand and weak supply are fuelling price rises. Buyers, so mortgage lenders say, are still managing to afford housing.
The majority of first time buyers are helped by their parents remortgaging to provide deposits, with investors still keen due to the influx of immigrants who need accommodation .
Buyer interest is strong as estate agents continue to receive many enquiries. Fewer sellers are willing to place their properties on the market which is adding to a squeezed supply, thus increasing price pressure.
Buy to let landlord demand is likely to remain strong for a while. Two thirds of current landlords plan to extend their portfolios, with many having access to finance from existing portfolios .
Moreover, some younger families are also looking for rental alternatives.
Interest rates are expected to increase again in November, with little chance of mortgage rates increasing to 7% as a result. Nonetheless, interest rate increases do affect expectations regarding future house price growth.
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Housing Market Very Strong
Fri, 29 Sep 2006
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