House prices continued on their increase trajectory in April, due to the drop in level of borrower’s
mortgage payment according to their income over the past six years.
Prices in property rose by 1.1% in April. Followed by rises of 0.5% in feb and 0.4% in March and add to a
year on year price increase of 2%.
Reason being that usual mortgage payments for new borrowers, both first time buyers and homeovers-
have nearly halved as a proportion of disposable earnings from a previous peak of 48% in 2007, to 28%
now, extremely lower than previous average of 36% recorded in 1984.
Low level of mortgage payments in relation to income continues to provide support for the market.
Market activity on the other hand remains constant according to historical standards with the number
of mortgage approvals for housing purchases.
Weak income growth and continuing below trend economic growth are likely to remain significant
constraints on housing demand during the remainder of 2013.
Latest figures do not give a detailed breakdown via geographical locations of properties. But the Land
registry showed a 0.1% rise for the month, but this masked a 2.5% rise in London compared to a 5.1%
fall in Middlesbrough.
The nation as a whole the fourth consecutive rise in the annual rate of growth shows the market in
once again beginning to fire, said Jonathan Hopper, managing director at property search consultants
Activity has been busier since the start of this year than at any time since the downturn, sending out
the positive message that the situation is finally improving. However property economist at Capital
Economics was less eager. House prices continued to rise in April, and at a fairly strong place. Other
housing market data are not so positive.