Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments:
“An annual house price increase of 8.7% will be good news for second-steppers looking to climb the property ladder. Measured growth in house prices post-recession is good news, as it demonstrates the housing market is on its way to making a healthy recovery and prevents buyers from being stuck in an equity trap.
“However, this growth is likely to be skewed by the London property market, which is on its own unique trajectory. House price growth in the rest of the country is far more subdued, with ONS data indicating prices across the rest of the UK are still lower than they were pre-crisis.
“The root of London’s rocketing house prices lies in a chronic shortage of suitable housing, as well as an increased injection of cash buyers into the market. Suggested solutions to limit mortgage lending, such as scaling back Help to Buy, will therefore do very little to solve this problem. The government’s attention must now turn to ramping up production of homes if they are to scale back the meteoric rise in prices in this region.”