Boom in house prices is a ‘national concern’

Pic: Rui Vieira/PA Wire
Pic: Rui Vieira/PA Wire
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Rising house prices are a grave concern for people in Yorkshire with so few homes on the market leaving many priced out of a move, the findings of a new survey suggest.

Some 39 per cent of people in the region, of those quizzed by the HomeOwners Alliance, said house prices are a ‘very serious issue’. The consumer group surveyed 2,500 people, both homeowners and those not on the property ladder, and concludes that high prices and a scarcity of available homes have now become a “national issue”.

Paula Higgins, the group’s chief executive, said: “Talk about the housing crisis has spread across the UK as homeowners everywhere have become worried that housing is becoming unaffordable and owning their own home is becoming an impossible dream for young people.”

The Government has sought solutions to help people with small deposits onto the property ladder through schemes such as Help to Buy, but concerns about affordability remain, the HomeOwners Alliance says.

Many homeowners who bought their house during the property market’s peak, before the financial crisis, saw the value of their property tumble when the downturn struck. Many are left trapped with little equity in their home or have found that they had ploughed more money into their property than it was worth, pushing them into negative equity, the survey found.

While the housing market has picked up significantly over the last year, fuelled by growing consumer confidence in the wider economy and the availability of cheap mortgage deals, some 26 per cent of people in Yorkshire consider negative equity still to be a very serious issue, with 36 per cent equally worried about housing availability in the region.

In London, house prices have seen their strongest growth for more than a decade and more than half (52 per cent) of those surveyed suggested that ‘the housing crisis is most acute in London’.

Ms Higgins said: “The surge in house prices this past year is not welcome news in the capital and it is a growing worry in other parts of the country, particularly for those hoping to buy their first home.

“Rising prices in London and elsewhere are due to a lack of supply as competition is fierce among buyers chasing too few homes.”

Gazumping, when someone thinks they have agreed a deal to buy a home before another buyer steps in and outbids them, is a real problem, she said.

Figures released by building society Nationwide show that the price gap between homes in London and in the rest of the UK is at the widest levels on its records. London house prices have leapt by 18.2 per cent annually - the strongest rate of growth since 2003 - to an average £362,699.

Across the UK, prices have risen by 9.5 per cent in a year, taking the typical value to £180,264, amid signs that the upturn in the market is gaining momentum across the country, Nationwide’s report for March said.