Nationwide has reported that property prices are continuing to rise at a ‘brisk pace’. Figures for August show an increase of 0.6% compared with July, and an increase of 3.5% compared with a year earlier. The average home is now valued at around £170,514.Robert Gardner, the building society’s chief economist, believes that the availability of cheaper mortgages and greater consumer confidence has helped increase activity in the market. A large proportion of this has been down to the government schemes which are helping to reduce the cost of credit and increase the availability of mortgages. This has enabled more first-time buyers in to the market. First-time buyers now account for 45% of the house purchase loans in the second quarter of the year, the highest quarterly level since 2005.Despite the levels of growth, some critics have warned that the boost in the housing market could create another price bubble. Jonathan Harris, director of mortgage broker Anderson Harris, said “Once interest rates start to rise, there could be plenty of people who find themselves in difficulty, so it is important that borrowers take care and ensure they do not overstretch themselves in their desperation to become a homeowner.”
However, Bank of England governor Mark Carney said that he was “very alert” to the issue.The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.Setfords Solicitors are a national full service law firm, with residential property solicitors in Caversham and across the country.