The latest house price index from Halifax revealed that there was another rise in house prices during the month of April.  The average house price rose 1.1% in a comparison with the previous month and in a year to year comparison the increase was at 2.0%.  The increase in April followed a 0.4% increase in March and a 0.5% increase realized in February. 

Continued availability of mortgage lending and low interest rates has helped to increase the number of buyers coming to the market.  Mortgages are now more affordable than in the past and are expected to continue to be so with lenders offering competitive deals that are attracting hopeful first time buyers. 

According to Halifax average mortgage payments in relation to disposable earnings has lowered.  In 2007 there was a high of 48% and currently the level is at 28%.  The average of all years since 1984 is 36%.  The current level of 28% is therefore revealing of how cheap mortgage borrowing is for new home buyers and home movers in relation to disposable earnings.

Martin Ellis, Halifax economist, said “The relatively low level of mortgage payments in relation to income continues to provide support for the market.  Market activity, however, remains subdued by historical standards with the number of mortgage approvals for house purchases, a leading indicator of completed house sales, easing slightly in the first quarter of 2013.

“Weak income growth and continuing below-trend economic growth are likely to remain significant constraints on housing demand during the remainder of 2013.”

Remortgages also remain cheap for homeowners with low interest rate deals being offered by lenders.