House prices top previous August 2008 peak

Even wealthiest in UK are now worried that their children won't be able to afford a house, claims new report

Latest figures from the Office for National Statistics (ONS) show that between August 2012 and August 2013, house prices rose 3.8 per cent, meaning that they are now above their previous January 2008 high.

The price data follows the latest Family Futures Survey by YouGov Plc for Lloyds Bank Private Banking which reveals that even wealthier parents who plan on helping their children buy their first property are concerned that they can’t afford to.

Around 57 per cent of parents with more than £100,000 of investable assets (excluding their main residence and pension) have either helped their children buy a property or plan on doing so, but 59 per cent think their children will still struggle to buy a property.

Parents in the North West and North East are most concerned (70 and 69 per cent respectively), while those in the East Midlands, the South East and London are least worried (52, 54 and 59 per cent respectively).

The research also shows that 4 per cent of wealthier grandparents have supported the 'bank of mum and dad' by giving their grandchildren financial assistance to buy a house.  16 per cent of parents who own more than one home do so for a family member to live there, a figure that rises to 25 per cent in London.

Nitesh Patel, Housing Economist at Lloyds Bank Private Banking, said: “Low interest rates, better availability of finance and a shortage of housing supply are contributing to house price increases across many parts of the country. Annual double digit growth in house price increases has returned to a few areas of London, but these areas are the exception rather than the rule with much more modest rises in most areas.   Despite improvements in affordability over the past few years, house prices remain above their long-term average in relation to earnings. The recent pick-up in house prices means that even wealthier parents are concerned about whether they can help lift their children onto the property ladder."

A separate report from the Wesleyan Assurance Society suggests that 81 per cent of professionals believe they will have to support their children financially well into adulthood. Samantha Porter, Wesleyan's Sales and Marketing Director, said: "There is no doubt that life is tough for this generation of young adults. They are leaving university with significant debt and have to raise a much larger deposit on their first home compared to their parents.

"However, it's also tough on parents as they find themselves supporting their children for much longer than they may have expected. They are also facing financial challenges themselves with changes to pensions and an increased cost of living.

The ONS figures indicate year-on-year price growth of 4.1 per cent in England, 1.1 per cent in Northern Ireland and 1 per cent in Wales, offset by a fall of 0.7 per cent in Scotland. Increases in England were driven by London (8.7 per cent), the East Midlands (3.8 per cent) and the West Midlands (3.5 per cent). Excluding London and the South East, UK house prices increased by 2.1 per cent .

In August 2013, prices paid by first-time buyers were 4.9 per cent higher on average than in August 2012.

Nicholas Ayre, managing director of home buying agency Home Fusion, said: "Supply constraints are such that if Help to Buy really did take off then a housing bubble might be possible. If more flats and houses are not built, a significant spike in mortgage transactions could substantially push up house prices. But we are nowhere near that just yet. While the recovery in property prices in London continues apace, this is far from the case throughout the UK. It is also worth remembering that transaction levels remain very low compared with what they were at the height of the housing boom.

"London continues to be a special case that almost needs its own house-price index, with no sign of a slowdown in price rises in the capital."

Discover more property articles at Homes and Property
PROMOTED VIDEO
News
The headstone of jazz great Miles Davis at Woodlawn Cemetery in New York
news
News
newsBear sweltering in zoo that reaches temperatures of 40 degrees
Arts and Entertainment
Professor Kathy Willis will showcase plants from the Royal Botanic Gardens at Kew
radioPlants: From Roots to Riches has been two years in the making
Extras
indybestThe tastiest creations for children’s parties this summer
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Property search
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Marketing Comms / Digital Marketing Specialist

Not Specified: Recruitment Genius: An exciting and rewarding role exists for a...

Search Engine Optimisation/ SEO Executive

£25000 - £28000 Per Annum: Clearwater People Solutions Ltd: Excellent opportun...

Junior Professional Services Consultant - SQL, Implementation

£30000 - £40000 per annum + BONUS + BENEFITS: Harrington Starr: A leading prov...

Electronics Design Engineer

£35000 - £45000 per annum + Benefits: Progressive Recruitment: My client are l...

Day In a Page

Super Mario crushes the Messi dream as Germany win the 2014 World Cup in Brazil

Super Mario crushes the Messi dream

Germany win the 2014 World Cup in Brazil
Saharan remains may be evidence of the first race war, 13,000 years ago

The first race war, 13,000 years ago?

Saharan remains may be evidence of oldest large-scale armed conflict
Scientists find early warning system for Alzheimer’s

Scientists find early warning system for Alzheimer’s

Researchers hope eye tests can spot ‘biomarkers’ of the disease
Sex, controversy and schoolgirl schtick

Meet Japan's AKB48

Pop, sex and schoolgirl schtick make for controversial success
In pictures: Breathtaking results of this weekend's 'supermoon'

Weekend's 'supermoon' in pictures

The moon appeared bigger and brighter at the weekend
Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor