“Each month, and largely regardless of the measure used, we are watching house prices and activity creep up further and further, but this morning’s figures show that they have now reached heights not seen for 11 years. Although the ONS release shows continuing regional discrepancies, with London outpacing the next best performing region by more than half, positive annual house price growth is now evident in most of England and Wales, although not yet in Scotland and Northern Ireland.
“Although the CML noted a drop in home-owner purchase lending and home mover lending over the past month, these do not impact the favourable outlook when looking at the gains made over the past year (+20% and +18% respectively), and we could easily see a gross mortgage lending outturn for the year well in excess of £160 billion. All in all, we are looking at a much stronger market in the second half of this year. Help to Buy has significantly improved confidence and eased accessibility to the market, with higher LTV loans starting to open the door for those with smaller deposits who may not have otherwise been provided with an opportunity to get their foot on the ladder.
“However, allowing more people to enter the market is not helpful if we do not have enough houses to satisfy demand. The UK market is overvalued on some metrics and affordability remains stretched for some individuals. This will continue until more houses are built. The government and industry need to work together to decide how to develop a market that is better able to support both homeowning ambitions and the full spectrum of housing needs.”