HOUSE prices have jumped almost £7,000 in the last month, to an all-time high of £327,797, according to Rightmove.
The surge was driven by a shortage of houses on the market, as more families search for homes out of cities due to the shift of working from home.
It also coincided with the stamp duty relief extension and a surge in cheaper mortgages.
Plus, there is growing optimism with buyers due to the vaccine roll-out.
Tim Bannister, from Rightmove: “This is only the second time over the past five years that prices have increased by over 2% in a month.
So, it’s a big jump, especially bearing in mind that the lockdown restrictions are still limiting the population’s movements and activities.
"The stars have aligned for this spring price surge, with buyers’ new space requirements being part of the constellation alongside cheap mortgages, stamp duty holiday extensions in England and Wales, government support for 95% mortgages and a shortage of suitable property to buy."
"It does mean that this spring’s buyers are facing the highest ever property prices.
"If you’re looking to buy in the current frenetic market then you need to be on your toes and ready to move more quickly than ever before.”
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.
Help to Buy Isa – It's a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move. These accounts have now closed to new applicants but those who already hold one have until November 2029 to use it.
Help to Buy equity loan – The Government will lend you up to 20% of the home's value – or 40% in London – after you've put down a 5% deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa – This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25% on top.
Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25% to 75% of the property but you're restricted to specific ones.
Mortgage guarantee scheme – The scheme opens to new 95% mortgages from April 19 2021. Applicants can buy their first home with a 5% deposit, it's eligible for homes up to £600,000.
With buyers snapping up properties quicker than ever before, the amount of housing stock has fallen to its lowest-ever level.
Estate agents were marking homes as sold within 45 days on average.
Richard Freshwater, director at Cheffins said: “This is the biggest lack of stock we’ve seen on the market for at least the past 20 years.
"Demand is huge, created by a perfect storm of low interest rates, the stamp duty holiday and changes in people’s working patterns. "
Today, new 5% deposit mortgages have been launched by leading banks including Natwest and Barclays as part of the government's 95% mortgage scheme.
Lenders pulled almost all of these types of mortgage deals when the coronavirus crisis hit last year as they were seen as too risky.
We explain how to find the best mortgage for you, including lenders offering "no deposit" loans.
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