House purchases 'unaffordable for many Londoners'

Rising house prices are forcing many Brits out of the property sector, according to new research.

A report published by Halifax showed that prices in the UK increased by 3.9 per cent in May, the third monthly increase since the beginning of the year.

House prices in the three months from March to May 2014 were two per cent higher than in the preceding three months of December 2013 to February 2014.

The figures also showed that prices in the three months leading up to May were 8.7 per cent higher than in the same three months a year earlier. This was marginally higher than in April when it was 8.5 per cent.

At the same time, home sales edged down by one per cent in April to 103,690, although transactions are still a third higher than they were in April 2013.

Commenting on the findings, Stephen Noakes, Halifax mortgages director, said: "On an annual basis housing demand is still strong and continues to be supported by a strengthening economic recovery. Consumer confidence is being boosted by a rapidly improving labour market and low interest rates, although growth in average earnings still remains weak.

"However, there are signs of a revival in house building which should bring supply and demand into better balance and curb upwards pressure on prices over the medium and longer term."

At the same time, there is also a lack of affordable new homes being built in the city. The latest report from the National Housing Federation showed that less than half of the homes needed to house the growing population are currently being built, with 52,500 new households expected to form each year up to 2021.

In addition, only 18,310 new homes were built between 2012 and 2013. The report also said that the average house price in the capital is 16 times the average wage.

Published 9th June, 2014

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