Two fresh sets of figures have revealed a significant rise in house prices
More from: Help to Buy continues to boost housebuilding
The Office for National Statistics reported a 3.1 per cent increase in house prices for the year to June 2013. And a survey by the Royal Institution of Chartered Surveyors (RICS) said prices were rising at the fastest rate since 2006.
According to RICS, the West Midlands and North-East England have seen their highest levels of interest among buyers for 14 years.
Two government initiatives, Funding for Lending (FFL) and the Help to Buy scheme were cited by RICS as key drivers in the growth spurt.
Under FFL, banks can borrow money at a cheaper rate from the Bank of England, providing they lend it on to businesses or individuals; the latter releasing money for house buyers.
And under Help to Buy, first time buyers put down a 5 per cent deposit that allows them to take out a government loan for up to 20 per cent of the value of the property.
However, in March, RIBA president Angela Brady said that while the Help to Buy scheme would ‘enable greater access to mortgage finance’, it did not ‘sufficiently address the root cause of the housing crisis’.
‘We are not building enough homes, many of those that are being built aren’t good enough, and we can not rely on private housebuilding alone to turn things around,’ Brady said.
A RICS spokesman conceded that while an increase in house sales was good news for surveyors, hikes in house prices put the government in a ‘difficult situation’.
‘The government wants to stimulate growth, but it needs to be mindful of price inflation; they can’t really win,’ he said.
Latest data shows signs house prices are on the up