The price of housing rose by 0.7 per cent in January, the 13th consecutive monthly increase, and prices were also up 8.8 per cent year-on-year, taking the average price of a house in the UK to £176,491.
The latest figures from a leading building society suggest that activity in the housing market is finally returning to ‘more normal levels” as a result of rising employment, low mortgage rates and higher confidence.
According to the building society, first-time buyer activity was also starting a recovery, with over 30 per cent more people buying their first homes in the third quarter of 2013 than did over the same period the year before.
A spokesperson for the building society explained that first-time buyers are the lifeblood of the housing market, accounting for a significant proportion of transactions and playing an important part in allowing others in the housing chain to complete their transactions.
They added that the typical first time buyer’s home cost around 4.6 times their average earnings, which he stressed was “well below” the record highs of 5.4 recorded in 2007, although it is above the 20-year average of 3.6 times earnings.
However, while the building society claimed that house prices rose by 8.4 per cent over 2013, the Land Registry’s figure was only 4.4 per cent, although the figures are calculated in a different way, which might explain the difference.
According to the Registry, there was also a marked difference in prices across the country, with an 11.2 per cent increase in property prices in London but a fall of 0.1 per cent in the North East.
All agreed, however, that the increased demand was fuelled in part by Government schemes, such as Help to Buy, particularly in areas such as Leeds, Wiltshire and Central Bedfordshire.