Borrowers In Southern England ‘Face Increasing House Costs’
Posted by Arouse in MortgageProperty in the Greater London region has surpassed the 300,000 pounds barrier for the first time, new figures indicate.
According to the latest Halifax House Price Index, the average home in the capital and surrounding towns rose to 313,122 pounds during the second quarter of 2007 - a figure which was mainly contributed to by the strength of London’s economy. With property in the area said to have seen the largest price increase over the last 12 months (18.4 per cent), the typical house is now beyond the new inheritance tax threshold of 300,000 pounds.
Meanwhile, property buyers in the south-east of England were also said to be facing pressure on their finances. As a result of homes rising past the 250,000 pounds stamp duty threshold to an average of 250,904 pounds, consumers are now liable to pay the three per cent levy on the value of their home. Consequently, buyers during the second quarter of this year would have to shell out 7,797 pounds in stamp duty - some 5,302 pounds higher than that noted over the course of the preceding quarter.
Commenting on the figures, Tim Crawford, senior economist for Halifax, said: “The typical homebuyer in London and the south-east, in particular, faces a rising tax burden due to the government’s continuing failure to increase the inheritance tax and stamp duty thresholds in line with house price inflation. We call on the government to raise the stamp duty thresholds and the inheritance tax threshold in line with past increases in house prices over the past decade. We believe the government also should commit to index link all property related tax thresholds to house price inflation in the future”.
Figures from the financial services firm also revealed that between April and June homes in the north of England exceeded the 150,000 pounds price limit. With the typical house in the area now at 155,188 pounds - only Scotland and the Yorkshire and Humber region were now said to cost less than 150,000 pounds. Although decreasing price rises over the second quarter were noted in the West Midlands, Wales and the south-west, overall Halifax suggested that the affordability of property is becoming an increasing concern among people across the country, “particularly for first-time buyers”. Northern Ireland was highlighted as a specific area of growth with homes in the principality up by 46.7 per cent over the last 12 months to 228,790 pounds.
Oliver Gilmartin, senior economist for the Royal Institution of Chartered Surveyors, claimed that as London becomes an increasingly “property rich city state”, consumers could be set to develop further difficulties making secured loan repayments. “With house prices continuing to rise in the capital, first-time buyers will struggle to access the market and with rents on the increase, would-be buyers will labour to afford the upfront buying costs”, he said.
Last week, Stuart Law, managing director of Assetz, claimed that first-time buyers and those renting property are the “main losers” following the Bank of England’s decision to raise the base rate in July - the third increase to take place this year. He reported that borrowers are increasingly unable to buy property as house prices continue to rise despite the Bank’s moves.
Abbi Rouse writes for 1 Stop Finance Shop. A one stop shop for all your bad credit loans, debt consolidation loans and loans news.Visit Today
