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House prices continue to rise

The cost of buying a house in the UK is continuing it’s steady rise, at the fastest rate since 2010.

Nationwide building society reported that house prices rose by 0.3pc in the month of June, and is rising at an annual rate of 1.9pc on average.

Again the Funding for Lending scheme launched by the Government last year has been accredited with helping the market pick up. The scheme makes credit, including mortgage loans, cheaper for consumers to borrow meaning more people are able to afford to buy houses.

However despite the positive outlook, there are growing concerns about an increasing divide between those who can afford to buy houses and those who can’t.

It was also reported today that Virginia Water, Surrey, has become the first village in the UK to have an average house price of over £1m, and that there are 1500 new ‘property millionaires’ being made each week.

As well as this it has been widely documented that, while in some areas of the UK house prices are rising, others are still witnessing decline. The areas in which prices are rising are seeing such an aggressive rise that they cancelling out the poorer areas, and skewing results.

The fact that disposable income is still falling and wages are remaining stagnant in most industries means that fewer people are able to afford to buy homes. Matthew Pointon of Capital Economics, said: “It is hard to see how stretched households will be able to afford a steady rise in house prices. Data released on Thursday showed that real household disposable income dropped by 1.7pc in the first quarter; the biggest quarterly fall since 1987. That does not suggest buyers will be in a position to start offering a lot more for their new home”.

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