House prices rise in every region of England

House prices in every region of England rose in September, according to official data published on Monday which reignited the debate about the prospects of a new house price bubble.

The Land Registry data showed that even before the government accelerated the second phase of its Help to Buy mortgage guarantee scheme, prices had increased 3.4% in a year on average, and were higher than in September 2012 in all English regions. However, prices in Wales were down by 1.7% year on year and fell by 0.4% in September.

Howard Archer, chief UK economist at IHS Global Insight, said: "There is a mounting danger that house prices could really take off over the coming months, especially if already significantly improving housing  market activity and rising buyer interest is lifted appreciably further by the Help to Buy mortgage guarantee scheme, which will take full effect in January."

Overall house prices in England and Wales continued to rise in September, increasing by 1.5% over the month to an average of £167,063, according to the Land Registry. This remained below the peak reached in November 2007, when average prices hit £181,839. There was also a jump in the number of homes sold for more than £1m.

The data, which does not include newbuild homes or those which have not changed hands since 1995 – but unlike other indices does include cash sales – covers the period before the launch of the second part of the government's controversial Help to Buy scheme earlier this month. The scheme gives a taxpayer-backed guarantee to lenders offering 95% mortgages that are open to first-time buyers and home movers on newbuild homes worth up to £600,000. Critics have argued it will further fuel an already rising market.

UK's 10 most and least affordable rural areas

Here are the 10 most affordable rural local authority districts according to Halifax's findings, with the average house price and the house price to annual local earnings ratio:

1. Copeland, North West, £ 100,791, 2.7

2. Stirling, Scotland, £ 149,838, 3.4

3. East Ayrshire, Scotland, £ 100,382, 3.5

4. Western Isles, Scotland, £ 102,592, 3.7

5. Pendle, North West, £ 101,296, 3.9

6. North Lincolnshire, Yorkshire and the Humber, £ 125,276, 4.0

7. Shetland Islands, Scotland, £ 140,610, 4.3

8. West Lindsey, East Midlands, £ 135,343, 4.4

9. Selby, Yorkshire and the Humber, £ 158,055, 4.4

10. Allerdale, North West, £ 133,364, 4.4

Here are the 10 least affordable rural local authority districts according to Halifax's findings, with the average house price and the house price to annual local earnings ratio:

1. Cotswolds, West Midlands, £ 318,128, 9.4

2. Torridge, South West, £201,076, 8.2

3. North Dorset, South West £215,906, 8.0

4. Chiltern, South East, £407,012, 7.6

5. East Devon, South West, £213,677, 7.5

6. Vale of White Horse, South East, £288,522, 7.4

7. Teignbridge, South West, £202,566, 7.4

8. North Devon, South West, £194,000, 7.4

9. East Dorset, South West, £281,760, 7.3

10. East Hampshire, South East, £291,990, 7.3

Rural retreat still costs £24,000 more than city home

The recent wave of first-time buyers into Britain's property market is helping to close the house price gap between urban and rural properties, a study has suggested.

But people buying a home in a rural retreat still pay nearly £24,000 more typically than those purchasing a property in a city, Halifax found.

In the past four years, the gap has been narrowing, with the average price of a home in an urban area rising at five times the rate of one in the countryside, at 10% compared with just 2%.

Halifax said this could reflect a recent increase in first-time buyers coming into the market to snap up properties. First-time buyers account for two-fifths (40%) of house purchases using a mortgage in rural areas, but in towns and cities they make up more than half (52%) of such transactions.

The Government has introduced a string of schemes to improve mortgage access. A mortgage price war was sparked after its Funding for Lending scheme was introduced last year and from this month people with deposits as low as 5% have been able to apply for state-backed mortgages under the Government's flagship Help to Buy scheme.

Lenders have been handing out more mortgages in recent months to first-time buyers than in any other period since the credit crunch started.

Halifax found that a house in a rural area costs £206,423 on average, which is 13% more than the typical cost of a property in an urban area at £182,710.

While a "rural premium" exists in every region across Britain, it ranges from £86,218 in the South East to £11,570 in the North East.

In percentage terms, people living in the West Midlands pay the biggest premium to live in a rural area, at 59%, while those living in the North East pay the least at 9%.

The average house price in the countryside is equivalent to 6.3 times gross annual average earnings, while in urban areas it is lower and therefore potentially more affordable, at 4.9.

Halifax found only five rural areas in Britain where house prices cost less than four times local annual earnings typically, which is the long-term average.

Copeland in Cumbria was named as the most affordable rural area, where the house price-to-earnings ratio was 2.7. This was followed by the Scottish regions of Stirling, where the ratio is 3.4, East Ayrshire where it is 3.5 and the Western Isles, with a ratio of 3.7. Pendle in Lancashire completed the list, with a ratio of 3.9.

At the other end of the scale, the Cotswolds were the least affordable area in rural Britain, with average house prices standing at £318,128 which is 9.4 times the local average income.

First-time buyers account for less than one quarter (23%) of house purchases in the Cotswolds, according to Halifax, marking the smallest proportion in Britain, while Copeland was found to have the biggest percentage share of people taking their first step on the ladder, at 58%.

Martin Ellis, housing economist at Halifax, said: "There is a significant premium on property in the countryside across Great Britain.

"Country living remains a widespread aspiration, but relatively high prices put rural homes out of the reach for many. Potential first-time buyers are particularly affected by high property prices, and consequently they account for a smaller proportion of homebuyers in the countryside than in urban areas."

Halifax used official figures and its own house price database to make its findings.

Here are average house prices by region, with the typical price of a rural property in 2013 followed by that of an urban property, and the percentage difference or "premium" in monetary and percentage terms:

:: North East, £137,010, £125,440, £11,570, 9%

:: North West, £ 200,997, £131,938, £69,059, 52%

:: Yorkshire and The Humber, £ 175,466, £127,452, £48,014, 38%

:: East Midlands, £ 179,692, £134,412, £45,280, 34%

:: West Midlands, £ 231,996, £145,801, £86,196, 59%

:: East of England, £ 235,876, £204,863, £31,013, 15%

:: South East, £318,185, £231,968, £86,218, 37%

:: South West, £232,630, £183,048, £49,583, 27%

:: Scotland, £ 160,374, £137,352, £23,022, 17%

:: Wales, £ 154,270, £131,184, £23,086, 18%

:: London (urban only), £ 316,293 n/a

:: Britain, £ 206,423, £182,710, £23,712

Mortgage lending at highest level since 2008

Mortgage lenders said on Friday that they were financing the largest house-buying spree for five years, in the latest sign of an accelerating housing market.

The Council of Mortgage Lenders (CML) described house prices in London as "resurgent", though it acknowledged that they had risen only modestly elsewhere in the country.

Amid continuing debate about the impact of government-sponsored schemes designed to make credit more easily available, research by the Liberal Democrat peer Lord Oakeshott showed, however, that the house price revival was not just a London phenomenon. 

Houses in more than 50 local authority districts were revealed as less affordable than at the peak of the 2007 credit crunch. Oakeshott's analysis of local authorities in England found the ratio between local house prices and local earnings was higher than it was in 2007 in districts as diverse as Rutland, the Cotswolds and the Suffolk coast.

According to the CML, almost £50bn was advanced to home buyers in the third quarter of 2013, a 17% increase on the previous three months and the highest figure since the third quarter of 2008. Despite a slight dip in September, lending for that month was up 41% on the same month last year, at £16bn.

"Indicators suggest we are witnessing the strongest house purchase performance in five years," said the CML's chief economist, Bob Pannell. "House prices too have revived, but modestly, aside from a resurgent London market."

The earlier than expected introduction of the second stage of Help to Buy, designed to help buyers with deposits as low as 5% of the value of a property has sparked a debate about the potential for a boom in house prices.

One third of tenants allege they have suffered a ‘retaliatory’ eviction

One third of tenants allege they have suffered a ‘retaliatory’ eviction or been threatened with one after making a complaint to their landlords about the condition of a property, or after asking for repairs to be carried out.

The claim comes from a survey carried out by online community The Tenants’ Voice.

While the figure seems very high, it is not clear whether it is disaffected tenants who have had bad experiences and who are drawn to the organisation and its website.

Nor is it clear whether these are tenants of landlords who by and large do not use managing agents: the survey says that 61% of tenants would prefer to talk to the agent through whom they found the property.

The site, which says 2,000 tenants took part in the survey, also claims that 61% of tenants are wary about complaining to their landlords and that damp is the number one complaint from 59% of tenants.

Seven in ten (71%) tenants in the survey claim to have paid for repairs to a rental property out of their own pocket rather than report the problem to their landlords.

Six in ten (61%) tenants polled said they had asked their landlords in the past to make repairs and that the landlords had been difficult or flatly refused to sort the problem out.

As well as damp, tenants said they had complained to their landlords about the general disrepair of the properties, while boilers and electrics were also a common focus for complaints.

Glenn Nickols, director of The Tenants’ Voice, said: “While 86% of tenants have never heard of retaliatory evictions according to our poll, a third of the tenants we surveyed who have been evicted or threatened with eviction have actually fallen foul of this practice.

“If tenants are not comfortable about approaching their landlords, then a good letting agent can be extremely helpful in resolving any problems.” 

House prices rise in Scotland say surveyors

A lack of available properties and "burgeoning" demand among buyers has forced house prices up in Scotland, according to a monthly survey.

The Royal Institute of Chartered Surveyors (Rics) found house prices increased in September.

Last month, 32% more respondents reported prices rises rather than falls in the Rics survey.

A net balance of 78% more surveyors also reported an increase in new-buyer inquiries.

However, Rics said the lack of homes coming onto the market resulted in the number of new instructions failing to keep pace with the "burgeoning" level of demand.

Looking ahead, more than half of those surveyed expected prices to continue to rise in the next three months.

'Big concern'

Responding to the latest survey, Rics director Sarah Speirs said: "It's encouraging that the market is starting to improve in all parts of the country, with more buyers looking to make a move and more sales going through.

"Even so, it's a big concern that the supply of property coming to the market is lagging so far behind demand, particularly with the recent launch of Help to Buy in Scotland.

"This imbalance is likely to result in further upward pressure in prices over the coming months, particularly in popular areas."

The report comes as it was revealed that house prices in and around Aberdeen have more than doubled in the last decade.

Data from the Nationwide Building Society showed that the increase is only matched by Islington and Westminster in London.

The growth in the north east has been largely put down to the expanding oil and gas industry and the workers it attracts to the area.

UK house sales at four year high

The number of homes sold in the UK hit an almost four-year high last month as the housing market recovery continues to gather pace, according to the September RICS Residential Market Survey.

The average amount of properties sold per chartered surveyor in the three months to September reached 18.7. Although still historically low, this is the highest figure since November 2009 and demonstrates the extent to which the market is now picking up across the country.

In tandem with increasing numbers of sales, prices continued to grow, with 54% more respondents reporting rises rather than falls. 

Prices have now steadily increased since Easter and, significantly, this growth was seen right across the UK. Last month, every part of the country saw prices go up, with the exception of the North East where prices fell modestly for the second successive month.

Unsurprisingly, with Government schemes such as Help to Buy enabling more buyers to access the market, demand rose steadily during September as a net balance of 49% more surveyors reported rises in new buyer enquiries. While the amount of homes coming onto the market also rose, it was not enough to keep pace with the burgeoning level of demand.

Looking ahead, predictions for future growth are equally upbeat. A net balance of 56% more respondents expect the number of transactions to increase further over the coming three months, while 48% more predict prices to continue their push upwards.

Peter Bolton King, RICS' global residential director, says: “It’s encouraging that the market is starting to improve in all parts of the country, with more buyers looking to make a move and more sales going through. Even so, it’s a big concern that the supply of property coming to the market is lagging so far behind demand. This imbalance is likely to result in further upward pressure in prices over the coming months, particularly in the nation’s hotspots.”

Help to Buy: Your questions answered.

Miles Shipside, Rightmove director and housing market analyst, tackles some of the most commonly occurring questions – including some common misconceptions.

Q. Is the scheme for new-build homes only?

A. No. The new Mortgage Guarantee scheme is for new build and existing property up to £600,000. The Equity Loan scheme, which has been running since April, is for new-build properties only.

Q. Is it just for first-time buyers?

A. No, the Mortgage Guarantee scheme is for any buyer as long as it is a residential repayment mortgage, not a buy-to-let.

Q. Is the scheme for the whole of the UK?

A. Yes, the Mortgage Guarantee phase of Help to Buy is available across the UK. The equity loan phase of Help to Buy is available in England and is for new-build properties only up to £600,000. Scotland has just launched a new build-only Equity Loan scheme called Help to Buy (Scotland), for properties up to £400,000. Wales has yet to formally announce an Equity Loan scheme but is expected to do so soon.

Q. Are we creating an artificial market or a ‘price bubble’? E.g. will I be in negative equity in 5 years’ time if I take up the scheme?

A. The property market is exactly that – a market. Property prices can go up and down depending on a number of factors, including the balance between supply and demand. It is worth remembering that prices are lower today in some parts of the country compared to five years ago, part influenced by the difficulty of buyers obtaining mortgages. Help to Buy will increase demand for property, though crucially, it is not just for first-time buyers and so as existing home owners move they will have to sell helping to increase property supply. Help to Buy is scheduled to last for three years, the thinking being the mortgage market will be functioning better when it finishes, enabling a smooth transition.

Q. I don’t need or want a government-backed mortgage, how will this affect me?

A. It is likely that many of the mortgage products for those with a deposit of 10% or more will not be assisted by the governments’ Help to Buy scheme. However, the improved lending environment should mean more competitive rates for those with 10% to 20% deposit benefitting all buyers, whether in the scheme or not. For those with 5% deposit this government underwritten scheme is the only real option.

Q. Will I be dependent on the state if I take out a Help to Buy mortgage? Can they change the rules?

A. A Help to Buy Mortgage Guarantee is essentially the same as a traditional 95% repayment mortgage, with all the usual terms and conditions between you and the lender. However, as part of the Mortgage Guarantee agreement between the government and the lender, the lender is not able to offer a Help to Buy assisted mortgage in some circumstances, such as buy-to-let mortgages. In reality you may not even spot it is a Help to Buy mortgage, other than being a 95% loan to value. Equity Loan Help to Buy mortgages on new build properties obviously have more rules.

Q. Is this phase of Help to Buy (Mortgage Guarantee) just an extension of the Equity Loan scheme to existing properties?

A. No. Phase two is a Mortgage Guarantee scheme. It involves a traditional repayment mortgage with a loan to value of up to 95% and is available on both new build and existing property. There is no equity loan. A buyer with a 5% deposit should ask a mortgage advisor to explore the possibility of a Help to Buy backed mortgage for the remaining 95%. Phase one (Equity Loan) is available on new build properties only and will run alongside the Mortgage Guarantee scheme. A. No. The new Mortgage Guarantee scheme is for new build and existing property up to £600,000. The Equity Loan scheme, which has been running since April, is for new-build properties only.

Q. Is it just for first-time buyers?

A. No, the Mortgage Guarantee scheme is for any buyer as long as it is a residential repayment mortgage, not a buy-to-let.

Q. Is the scheme for the whole of the UK?

A. Yes, the Mortgage Guarantee phase of Help to Buy is available across the UK. The equity loan phase of Help to Buy is available in England and is for new-build properties only up to £600,000. Scotland has just launched a new build-only Equity Loan scheme called Help to Buy (Scotland), for properties up to £400,000. Wales has yet to formally announce an Equity Loan scheme but is expected to do so soon.

Q. Are we creating an artificial market or a ‘price bubble’? E.g. will I be in negative equity in 5 years’ time if I take up the scheme?

A. The property market is exactly that – a market. Property prices can go up and down depending on a number of factors, including the balance between supply and demand. It is worth remembering that prices are lower today in some parts of the country compared to five years ago, part influenced by the difficulty of buyers obtaining mortgages. Help to Buy will increase demand for property, though crucially, it is not just for first-time buyers and so as existing home owners move they will have to sell helping to increase property supply. Help to Buy is scheduled to last for three years, the thinking being the mortgage market will be functioning better when it finishes, enabling a smooth transition.

Q. I don’t need or want a government-backed mortgage, how will this affect me?

A. It is likely that many of the mortgage products for those with a deposit of 10% or more will not be assisted by the governments’ Help to Buy scheme. However, the improved lending environment should mean more competitive rates for those with 10% to 20% deposit benefitting all buyers, whether in the scheme or not. For those with 5% deposit this government underwritten scheme is the only real option.

Q. Will I be dependent on the state if I take out a Help to Buy mortgage? Can they change the rules?

A. A Help to Buy Mortgage Guarantee is essentially the same as a traditional 95% repayment mortgage, with all the usual terms and conditions between you and the lender. However, as part of the Mortgage Guarantee agreement between the government and the lender, the lender is not able to offer a Help to Buy assisted mortgage in some circumstances, such as buy-to-let mortgages. In reality you may not even spot it is a Help to Buy mortgage, other than being a 95% loan to value. Equity Loan Help to Buy mortgages on new build properties obviously have more rules.

Q. Is this phase of Help to Buy (Mortgage Guarantee) just an extension of the Equity Loan scheme to existing properties?

A. No. Phase two is a Mortgage Guarantee scheme. It involves a traditional repayment mortgage with a loan to value of up to 95% and is available on both new build and existing property. There is no equity loan. A buyer with a 5% deposit should ask a mortgage advisor to explore the possibility of a Help to Buy backed mortgage for the remaining 95%. Phase one (Equity Loan) is available on new build properties only and will run alongside the Mortgage Guarantee scheme.