Average house prices in the UK are now within reach of the £250,000 mark, according to the Office of National Statistics, after rising by 5.4% in the year to November.
The latest House Price Index from the ONS suggests that prices are rising throughout the country, reaching an average of £248,000.
Overall, the pace of house price growth remains strong across all parts of the UK, it said.
The annual growth figure showed a slight drop to 5.4% in November from 5.5% in October, but solid month-on-month growth of 0.5% kept prices rising steadily ahead of the Christmas season.
As expected, the market remains strongest in London, where annual growth of 11.6% is more than double the national average. Average prices in the capital are now at £441,000, the report indicates.
Stamp Duty
One downside to the rise in average prices is that thousands of home-movers will be subject to higher stamp duty charges.
Homebuyers currently face a charge of 1% when they purchase a property priced above £125,000, but this rises to 3% when the price reaches £250,000.
|
Purchase Price |
Stamp Duty Percentage |
|
£0 - £125,000 |
0% |
|
£125,000 - £250,000 |
1% |
|
£250,000 - £500,000 |
3% |
|
£500,000 - £1,000,000 |
4% |
|
£1,000,000 - £2,000,000 |
5% |
|
£2,000,000+ |
7% |
|
£2,000,000+ [Bought by corporation] |
15% |
Find out more about stamp duty charges here.
But among the fastest rising prices are the property types sought by first-time buyers, which rose by 6.4% in the year to November.
This can be attributed in part to Government schemes including Funding for Lending and Help to Buy, which have improved the availability of high loan-to-value mortgages and driven up demand from first-time buyers.
The Help to Buy scheme was extended in early October, three months ahead of schedule. The number of participating lenders continues to grow, with Santander and the Post Office becoming the latest to join the scheme.
.v7 "The rise in average prices to £248,000 could see thousands of homebuyers paying more stamp duty.")
Prices Boost Confidence
The consistent rise in house prices has inspired conference in the UK property market, and especially in the north of England.
92% of homeowners expect property prices to rise over the first half of 2014, according to the latest Housing Market Sentiment Survey from Zoopla - the highest level in four years.
“Early indicators suggest that we can look forward to a busy first few months to 2014,” said Zoopla's Lawrence Hall.
Meanwhile, the percentage who expect prices to fall has fallen to just 3%, compared to 19% a year ago – a factor which is prompting more people to think about buying a property.
Additionally, the withdrawal of Funding for Lending support from the residential mortgage sector is yet to impact upon mortgage rates.
As we highlighted yesterday, local lenders continue to challenge the big banks with 95% LTV mortgages.
The 4.79% discounted variable rate mortgage offered by the Hanley Economic Building Society is one of the most competitive deals on the market at this loan-to-value range.
Find all the latest mortgage deals here at Which4U.
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