Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments on the ONS House Price Index (March) and CML trends in lending (Q1 2015):
“Existing homeowners will be encouraged by strong annual growth in prices in today’s ONS data, with a 9.6% increase making for significant returns. However, given the fact that it far outstrips wage increases, the higher rate of house price growth brings with it genuine concerns about affordability.
“Certain regions of the UK have seen particularly high growth, with the accelerating rise of house prices in the South-East and East suggesting that the London market is having a ripple effect in other parts of the country. This trend looks likely to continue as people look further out into the commuter belt for good value.
“First-time buyers have seen below average price increases over the last year, but even this will be scant consolation when today’s CML figures showing that lending to first-time buyers was down in the first quarter of 2015 compared with the same period last year. The new government has absolutely no time to waste in introducing its new proposals to help first time buyers – but the reality is it will take much more than Help to Buy ISAs and a limited number of starter homes to address the challenges faced by aspiring buyers on modest incomes.