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Sector welcomes positive price growth, but borrowers ‘still jump through hoops’

  • 19/05/2021
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Sector welcomes positive price growth, but borrowers ‘still jump through hoops’
Mortgage brokers and lenders have said ONS price growth data for March is a positive sign, but some borrowers “will still struggle,” or “have to jump through hoops.”



House prices across the UK grew 10.2 per cent in the year to March 2021, the ONS said.

The rate of growth was the highest since August 2007, with an acceleration having started in H2 2020 and then continuing into this year.

The increase month-on-month was 2.1 per cent from February to March 2021, compared to 0.8 per cent for January to February.

Price growth was strongest for detached properties, at 11.7 per cent. For a flat or maisonette it was 5 per cent.

The average price of a home hit £256,000 in March, up from £232,000 in the same month last year — for England, Wales, Scotland and Northern Ireland.

In each of the four countries of the UK, average prices reached record levels.

For England, prices grew 10.2 per cent to £275,000. In Wales, they were up 11 per cent to £185,000. 

Scotland saw growth of 10.6 per cent to £167,00. While in Northern Ireland, prices were up 6 per cent to £149,000.

Yorkshire and the Humber recorded the highest growth for a region at 14 per cent, and the lowest was in London at 3.7 per cent.


Positive and challenging

The mortgage sector interpreted the price growth as positive.

“This confidence in the market is hugely positive. However, with property prices continuing to increase, those trying to get on the ladder are going to struggle,” said Gareth Lewis, commercial director at lender MT Finance.

He added: “Government has a responsibility to make property more affordable.”

At Aldermore, head of mortgage distribution, Jon Cooper, said: “House price rises often indicate the health of the wider economy, so this is a positive sign for the UK’s recovery.”

He added: “We’re seeing a shift in preference as buyers seek more space and access to nature.”

Simon Furnell, chief operating office at Masthaven Bank, also noted, “the race for space,” in rural and suburban areas. 

But Furnell added: “It’s important that the sector and house buyers prepare for possible volatility once the stamp duty holiday deadline passes on 30 June,” — with specialist lenders having a role to play.

On the regional picture, Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “With prices in Yorkshire and the Humber continuing to outpace London – as people no longer have to be in the capital as much as before – one hopes we end up with a more balanced housing market across the country.

Harris added: “Lenders have plenty of cash. . .  and it’s hard to see interest rates rising any time soon, which is good news for borrowers. But the impact of the pandemic means that some, such as the self-employed, still have to jump through hoops when it comes to getting a mortgage.”

Taking the wider investor’s perspective, SPI Capital chief executive, Anna Clare Harper, said: “The rise and rise of house prices is something we have become accustomed to. . . With construction costs rising, it’s easy to see how house price rises will continue over the coming years.”

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