Rise in house prices leaves many locked out of mortgage market

Millions of people across the UK may have no other option than to rent property as house prices continue to increase, according to new research.

Findings published by property consultants Savills revealed that over one million extra households will be forced into rental accommodation over the next five years.

Its report warned that many of these people are earning too much to qualify for state support, but too little to get on the housing ladder.

The research coincides with another study published by Sequence (UK) which revealed that house prices increased by as much as £7,430 last month.

For the typical family home, prices increased by £5,583, with property prices in London going up even more.

In fact, the report showed that average prices in the capital hit a new high of £404,199, which was up four per cent monthly and ten per cent annually.

David Plumtree, chief executive of Sequence, said: "The appetite to buy property across the UK has risen to record levels."

The competition for property has also intensified. Mr Plumtree added: "This has impacted on property prices as competition for every new instruction intensifies and we have seen the average house price rise by three per cent in October.

"In London where close to 14 people are competing for every property, prices have risen by four per cent on month and ten per cent annually. This has taken the average price of a London property above the £400,000 threshold for the first time since our records began."

This has undoubtedly left many first time buyers unable to afford a deposit to buy a home, while there have been reports of a significant number of existing homeowners struggling to keep up with repayments on their mortgage.

Published 28th November, 2013

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