Filter news articles:

House prices set to soar by 20%

House prices set to soar by 20% in the next five years with average home  costing almost £200,000

  • Savills said it has upgraded its housing  market forecast from a rise of 11.5 per cent by 2017 to a jump of 18.1 per  cent
  • And gross mortgage lending rocketed to £15billion in June,  a massive increase of 26 per cent

House prices will rise by nearly 20 per cent  over the next five years with the cost of the average home reaching nearly £200,000, research revealed today.

Savills, the upmarket estate agency, said it  has upgraded its housing market forecast from a rise of 11.5 per cent by 2017 to  a jump of 18.1 per cent.

The research said ‘government intervention’ partly triggered the upgrade while critics warned the interventions are fuelling  a house price boom but doing nothing to help lending to businesses.

 

 Read more 

 

House prices will rise by nearly 20 per cent over the  next five years with the cost of the average home reaching nearly £200,000,  research revealed today

Yesterday the Council of Mortgage Lenders  said gross mortgage lending rocketed to £15billion in June, a massive increase  of 26 per cent on the same month last year.

It is the highest monthly total since October  2008, the month that taxpayers were forced to bail out both Royal Bank of  Scotland and Lloyds Banking Group as the crisis struck.

Millions of homeowners have never enjoyed  cheaper mortgage deals, while the number of first-time buyers is rising sharply  helping by loans which demand only a small deposit.

  

Savills predicts the average home, worth  around £162,000 at the beginning of the year, will be worth £191,631 by the end  of 2017, a rise of nearly £30,000 or 18.1 per cent.

While mortgage lending is rising, lending to  businesses continues to fall.

Yesterday the Business Secretary Vince Cable  said estimates show net lending by UK banks to small and medium-sized firms has  been negative for 22 of 24 months to May.

Separate figures, from the Bank of England,  also published yesterday, show lending to all businesses contracted by around £4.5billion between March and May.

 

Yesterday the Council of Mortgage Lenders said gross  mortgage lending rocketed to £15billion in June, a massive increase of 26 per  cent on the same month last year

It warned: ‘The annual rate of growth in this  measure of the stock of lending to businesses has been negative for the past  four years.’ Lord Oakeshott, a leading LibDem peer, slammed Funding for Lending,  a Government scheme launched last

August, which allows banks to borrow cheap  money if they maintain or increase lending to households or firms.

He said: ‘Funding for Lending is turning into  a total disaster.

‘It is pouring fuel on the flames of an  already over-heated housing market while doing nothing to help businesses.’ Howard Archer, chief UK economist at the consultancy IHS Global Insight, said: ‘The Funding for Lending Scheme continues to have very limited impact in  supporting bank lending to companies.

‘At best, it appears that it may have stopped  lending to businesses from falling more than it has.’

 

Lucian Cook, director of residential  research at Savills, said: ‘A combination of low interest rates and stimulus  measures means there is capacity for improved price growth over the next three  years or so.’

The Government’s two Help to Buy schemes are  also helping to fuel the housing market, pushing a home even further out of the  reach of many workers on average salaries.

One of the Help to Buy schemes allows people  to buy a new-build home with only a five per cent deposit.

The other Help to Buy, which will launch in  January, allows anybody from a first-time buyer to a ‘second move’ to buy an old  or new home for up to £600,000 with only a small deposit, but a Government  guarantee on a further chunk of the loan.