More than half of homeowners say it’s the right time to cash in after average price of a property went up by £50 a DAY in past year
London and South East have led boom but there are signs it is spreading Poll shows half of homeowners are already expecting higher mortgage costs London and South East have led boom but there are signs it is spreading
By HUGO DUNCAN
PUBLISHED: 00:30, 7 August 2014 | UPDATED: 00:30, 7 August 2014
More than half of homeowners think now is a good time to sell after house prices rose nearly £50 a day during the past 12 months.
The value of the average home jumped by £17,261 to £186,322 in the year to July – or £47.29 a day – according to Halifax.
The 10.2 per cent rise is the biggest since the run on Northern Rock in September 2007 heralded the start of Britain’s financial crisis.
Surging prices have led a record proportion of homeowners to believe it is ‘a good time to sell’, according to a Halifax report – creating the right conditions for a surge in the number of homes coming on to the market.
But signs that the housing market is accelerating will fuel speculation that the first interest rate rise since July 2007 could be just months away.
The Bank of England is expected to freeze rates at 0.5 per cent when its latest meeting ends at noon today, but experts say an increase before the end of the year is a distinct possibility.
A poll by ComRes for ITV News last night showed that half of mortgage holders, or 49 per cent, are already cutting back their spending over concerns that the rate may rise.
Others have also been affected by fears of an increase, with 35 per cent of all adults tightening their purse strings in anticipation of higher rates.
Rob Wood, chief UK economist at Berenberg Bank, said: ‘Far from slowing, house price inflation may even be accelerating. The UK is cruising at strong growth rates. We expect the Bank of England to respond by hiking rates in November.’
The Halifax report found the average house price in the UK rose by 1.4 per cent in July alone – the equivalent of £80 a day. London and the South East have led the recovery in the housing market but there are signs that it is spreading elsewhere, with hotspots springing up in the regions.
Stephen Noakes, mortgages director at Halifax, said: ‘Rising prices mean people think it is a good time to sell. Much of the inflation is coming from London and the South East.’
Halifax said 57 per cent of those questioned believed the next 12 months would be ‘a good time to sell’, while only 32 per cent felt it would be ‘a bad time’.
The key figure is the difference between the two percentages, which is the biggest since Halifax started collecting the data in April 2011 – suggesting confidence among sellers is sky high.
But the proportion of people who think it is a good time to buy has fallen to its lowest level on record as soaring prices and fears of higher interest rates dent confidence. Estate agents in London said increasing numbers of homeowners are selling up and leaving the capital for the regions.
Jonathan Hudson, of Hudsons Property in the West End, said: ‘It has been clear since late last year that the London ripple had taken effect. People selling up in the capital and looking to upsize to larger family homes are clearly fuelling price growth in regional areas.
‘It is good for sellers who are still looking to move outside London where prices still have lots to make up on London, meaning a new lifestyle, bigger home and perhaps reducing or losing their mortgage debt altogether before any interest rates rises kick in.’
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