Brits priced out of property market

Increasing house prices are preventing many people from getting their own property, according to new findings.

Research published by Nationwide revealed that property prices increased by 0.7 per cent in May 2014 and were 11.1 per cent higher than May 2013.

This represents the 13th successive monthly increase; taking the average price of a typical home to £185,512.

Commenting on the findings, Robert Gardner, chief executive of Nationwide said the government's mortgage lending rules are also having an impact on the number of people who are able to own a property.

Earlier this year, new rules came into force that resulted in homebuyers facing more detailed questions on whether they can afford a mortgage.

He said: "There have been tentative signs that activity in the housing market may be starting to moderate, with mortgage approvals in April around 17 per cent below January’s high. It is too early to say whether nationally this is indicative of a cooling trend in the wider market. 

"The slowdown may partly be the result of the introduction of Mortgage Market Review (MMR) measures, which may take a few months to bed down. The underlying pace of activity should become more evident as we move through the summer months and the impact of MMR becomes clearer."

The research also showed that first-time buyers accounted for less than half (48 per cent) of house purchase activity in March.

There is also some evidence that the Help to Buy scheme is not as much of a remedy as it was first deemed to be and has played less of a role in areas that have seen the strongest recovery in house prices, according to the report.

It revealed that London has recorded the fastest pace of house growth in recent quarters, with prices rising at an annual pace of 18 per cent in the first quarter of the year.

However Help to Buy has only accounted for around four per cent of mortgage completions. 

Published 4th June, 2014

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