Homebuying faster than building

Tim Wallace
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PRESSURE mounted further on Britain’s strained housing market yesterday as a raft of new data showed home purchases soaring at a far higher pace than house building.

Mortgage lending jumped by 17.4 per cent in the year to March, according to the Council of Mortgage Lenders (CML).

The rise means 50,500 mortgages were advanced in the month, though the pace of the increase has slowed from recent highs of 30 per cent on the year.

While home buying is taking off, growth in construction remains far slower. The number of completed houses came in at 112,630 in the 12 months to March, up just four per cent on the previous year.

“Limited supply of houses is a factor pushing up prices in an increasing number of areas,” said economist Howard Archer from IHS Global Insight. “We expect house prices to increase around eight to nine per cent in 2014.”

However, there are some signs this could increase – work began on 133,650 homes in the first quarter of the year, up 31 per cent on the year.

Meanwhile rents continued to rise at below the pace of inflation.

The average monthly payment increased by 0.6 per cent – a £5 rise on the year to £741 in April, according to LSL Property Services.

Rents have risen by 12.9 per cent since the start of 2010, below the 14.5 per cent increase in prices over the same period.