UK: House prices surge to a new record high
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House prices surged by 11.7% across the UK during the 12 months to July to reach a new record high of £272,000, according to Office for National Statistics data.
House prices surged by 11.7% across the UK during the 12 months to July to reach a new record high of £272,000, according to Office for National Statistics data. Average house prices in Scotland have now passed their pre-financial crisis peak of June 2008 and, alongside England, property values there are now at record levels, the ONS said.
House prices in England are now 13% above their previous high, while those in Scotland have climbed to 0.7% above previous peak levels.
Wales is not far behind Scotland, with prices there just 0.8% below their 2008 peak.
Northern Ireland remains the area with the furthest climb to recover to previous peak levels, with prices there 46.7% below their peak.
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During the 12 months to July, average house prices have increased by 12% in England to £284,000, by 7.4% in Wales to £171,000, by 7.6% in Scotland to £198,000, and by 4.5% in Northern Ireland to £139,000, according to the ONS figures.
Estate agents have reported seeing signs of disruption to the housing market in Scotland in recent weeks, with potential buyers putting their plans on hold while they wait to see what the outcome of the referendum on independence will be.
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The report also showed that first-time buyers face having to pay 13.5% more to get on the property ladder than they did a year ago - and the ONS said this is the highest annual increase recorded for this sector since March 2005.
The average price paid by a first-time buyer in July this year was £209,000.
Figures released by the Council of Mortgage Lenders (CML) last week showed that the number of mortgages handed out to first-time buyers passed 30,000 in July, marking the first time this has happened during a one-month period since August 2007.
But first-time buyers are typically having to borrow record amounts to get on the property ladder, with the average size of a new loan taken out by this sector standing at £127,500 in July, according to the CML’s figures.
The current low interest rate environment is helping to keep borrowing costs down, but home owners have been warned to start thinking now about how they will cope with the prospect of higher payments when the Bank of England base rate eventually starts to move off its historic 0.5% low.