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Year on year house prices up by 10.2%

In spite of the recently reported fall in the house prices last month of 0.8% average, the cost of buying a house has risen by over 10% since this time last year. Detailed figures show that prices in England have grown at the fastest rate since 1973, outstripping most other European countries. These figures, which have been released by the Halifax, are in conflict with some other surveys which have predicted a slowdown, possibly because of the fall mentioned in one of our recent posts.

However, there is no denying that the demand for housing is still high and as with most other items, the price is determined by the available supply. Most of this demand is in the London area where jobs are more plentiful and the commuter belt around the capital is seeing a huge surge of demand.

Although this and other governments have tried on numerous occasions to stimulate demand in the North of the country, these schemes have a blighted history and usually end up failing.

The help to buy scheme has, in some peoples opinion, fuelled the demand, an some lenders including the Halifax have put in place moves to reduce its share of mortgages under this scheme. Now, with them, it is only possible to raise a maximum of £150,000, down from the previous £500,000.

As we see it, the house prices will continue increase, until supply can satisfy demand, or the next crash comes, both of which could be a long way away.

Picture: Images Money

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