Homebuyers might be forced to apply for a larger mortgage after recent figures showed house prices have now reached a record high.
According to the latest figures from Halifax House Price Index, the average cost of a home in the UK is £278,123, having increased by nearly £28,000 over the preceding year.
This represents an annual growth rate of 10.8 per cent, which is a level that has not been seen since June 2007 when it was 11.9 per cent.
Managing director of Halifax Russell Galley noted this is the largest cash increase in one year recorded in the index’s 39-year history.
“Lack of supply continues to underpin rising house prices, with recent industry surveys showing a dearth of new properties being listed, now a long-term trend,” he stated.
Mr Galley informed that detached properties are particularly in demand with the price of this type of residence having increased by £43,251 in the 12 months leading to February 2022, at a rate of 11 per cent.
Consequently, the amount of money that has been borrowed by homebuyers has risen over the last year, according to the Bank of England.
Its latest findings revealed the value of residential mortgage loans exceeded £1.6 billion at the end of the fourth quarter last year. This represents a 4.7 per cent increase from the same period in 2020.
The number of mortgages approved for residential purchases also increased, rising by four per cent in January this year to 73,992. Despite this increase, this was still 23 per cent below January 2021’s figure.
For more information on applying for a mortgage, get in touch with our mortgage advisors in Liverpool.