Record month for house prices in region
HOUSE prices rose another 1.6% last month after two recent interest rate rises failed to take the heat out of the market, according to new figures.Britain's biggest mortgage lender Halifax said the year-on-year increase now stood at 17.
By Jonathan Barnes
HOUSE prices rose another 1.6% last month after two recent interest rate rises failed to take the heat out of the market, according to new figures.
Britain's biggest mortgage lender Halifax said the year-on-year increase now stood at 17.8%, up from 16% in January and 15.4% in December.
The average price of a home being sold is currently at £148,089.
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In Suffolk, it was one of the best Februarys on record, according to a leading estate agent.
The latest surge in prices came despite action from the Bank of England to raise the cost of borrowing in November and February, lifting mortgage payments as a percentage of earnings from 13.9% to 15.5%.
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Shane O'Riordain, general manager of group economics at Halifax, said: "The ongoing strength of the housing market is underpinned by the favourable combination of a strong labour market, historically low interest rates and low mortgage payments in relation to earnings."
Gary Smith, Suffolk chairman of the National Association of Estate Agents, said: "The market was very buoyant in January and in February it has got even hotter.
"It really is a very good market at the moment. This is a result of good demand and not sufficient properties to meet that demand.
"I wouldn't expect things to change. February is traditionally a very quiet month - one of the quietest of the year.
"The fact that it has been such a good month is quite remarkable - it was one of the best Februarys on record."
He said the situation was not good news for first-time buyers and added: "I think there is a possibility of a two-tier market.
"The first-time buyers' end of it will be constrained by affordability and the rest of it will keep going upwards."
Yesterday's figures come a week after the Nationwide said the price of an average property moved 3.1% higher in February following a 0.7% increase in January.
The two sets of figures will add pressure on the Bank's Monetary Policy Committee (MPC) to consider another rise in rates at its latest two-day meeting, which started today.
The Halifax said the level of housebuilding remains very low when compared with previous decades and is failing to keep pace with the projected rise in the number of households over the next 20 years.
It added the growth in house prices had led to a "significant increase" in the number of properties potentially subject to inheritance tax.
The average first-time buyer also pays more than £1,000 in stamp duty, equivalent to about two weeks of their annual income. In 1993, the typical first-time buyer paid no stamp duty.