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Capital prices make cheap mortgages even more desirable

Date: Fri, 03 Feb 2006

The increasing cost of property is likely to push up demand for a variety of cheap mortgages.

A new survey from Hometrack reveals that the cost of house prices increased by 0.1 per cent in January following a strong rise in London selling prices.

The property analyst concluded that January's house prices increased by 0.2 per cent in the capital – a sign that the city's housing market is enjoying a strong period.

The rest of the country reported a more stable market, with the average price of a UK property reaching £161,000 – 0.25 per cent higher than in November as buyers seek out cheap mortgages to fund purchases.

"The scale of new buyer registrations over the next few weeks will be an important indication of what sort of year we can expect for the market," said Richard Donnell, director of research at Hometrack.

He added: "The key question is whether the momentum from late 2005 will revive over the next few weeks. If it does then values are likely to keep rising in the run up to spring."


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