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House prices surge in West Midlands as other areas recede

Properties in the region rose by 1.9 per cent in the past month, to an average of £135,228, while only two others reported growth

House prices are still rising in the West Midlands

The West Midlands was the only UK region reporting a significant rise in house prices last month, new data shows.

Properties in the region rose by 1.9 per cent in the past month, to an average of £135,228, while only two others reported growth – London at 0.1 per cent and the South East at 0.6 per cent.

The latest official figures from the Land Registry found that while UK-wide average prices over the year lifted 6.4 per cent to £172,011, monthly prices were flat on May.

Analysts are likely to take this as evidence that tighter lending measures, such as April’s Mortgage Market Review and new rules in June from the Bank of England, are beginning to cool the market.

Jeremy Duncombe, director of the Legal & General Mortgage Club, said: “These figures show that the break neck pace of the housing market set in certain parts of the UK is starting to ease off.

“The aim needs to be for the market to be sustainable over the long-term, and steady price increases broadly in line with inflation is a far healthier state of affairs.”

The region with the largest fall was Yorkshire & Humberside with a 1.3 per cent decline, while it was one per cent in the North East and East Midlands and 0.9 per cent in the South West.

The British Bankers’ Association has also reported a drop in mortgage approvals, which are seen as an indicator of future sales.

The Mortgage Market Review introduced strict affordability tests on borrowers in April.

And under Bank of England measures introduced two months later, lenders must ensure no more than 15 per cent of new mortgages are given to people borrowing more than 4.5 times their income.

Lenders will also have to stress test borrowers’ ability to repay loans if their mortgage rate were three per cent higher than the rate at the time the loan was approved.

 

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