House prices rise in a further sign that the property market is picking up steam.

House prices rise in a further sign that the property market is picking up steam.

Strong house price growth pushed property values above their pre-correction peak to hit a new high in June, figures showed today.
The average cost of a home in England and Wales stood at £181,619 at the end of the month, overtaking the previous record of £180,983, set in November 2007, according to the Land Registry.
House prices rose by 1.1 per cent in June, in a further sign that the property market is picking up steam again, following the lull in the run up to the General Election.

• Related article: Number of houses for sale continues to fall

The annual rate at which prices are rising also accelerated, increasing to 5.4 per cent, up from 4.6 per cent in May.
The north east posted the strongest growth for June, with prices soaring by 3 per cent during the month, followed by London at 1.8 per cent and Wales at 1.7 per cent.
But in Yorkshire and the Humber property values dropped by 0.9 per cent, while in the east they dipped by 0.8 per cent and in the West Midlands they edged 0.2 per cent lower.
Year-on-year, house price rises remain strongest in London at 9.2 per cent, but gap between the capital and other regions is narrowing, with growth of 8.4 per cent in the south east and 7.8 per cent in the east.
Southern regions continue to outperform northern ones, with annual house price inflation running at just 1.4 per cent in Yorkshire and the Humber, 2.1 per cent in the West Midlands and 2.4 per cent in the north east.

"Average cost of a fixed rate mortgage has now fallen below that of a variable rate deal"

In a further sign of the slowdown the property market suffered in the run up to the General Election, the number of sales completed during April, the latest month for which figures are available, dropped by 19 per cent to just 57,180.
There was also a steep fall in the number of homes that changed hands for more than £1m, possibly due to the threat of the introduction of a Mansion Tax if Labour won the election.
A total of 874 properties changed hands for a seven-figure sum during the month, down from 1,114 in April 2014.
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Meanwhile, research from financial information group Moneyfacts showed that the average cost of a fixed rate mortgage has now fallen below that of a variable rate deal.
The group said a typical two-year fixed rate loan for someone with a 60 per cent deposit was now just 1.05 per cent, while the corresponding variable rate deal cost 1.08 per cent.
The change is good news for borrowers who want to take advantage of the current record low rates following Bank of England Governor Mark Carney’s recent warning that interest rates could start to rise at the turn of the year.
Charlotte Nelson, finance expert at Moneyfacts.co.uk, said: “In light of the Governor’s statement, a variable rate tracker mortgage can no longer be considered the best way to ensure lower monthly repayments.
“Borrowers on a variable rate will certainly notice a difference in their monthly repayments when the inevitable happens and base rate rises.

“Opting for the lowest variable rate at a 60 per cent loan-to-value ratio today would cost you £442 a year more on a £150,000 mortgage than the lowest two-year fixed rate available if the Bank Rate goes up by just half a per cent.”

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