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How to exploit the highest rise in house prices for five years

Published on 28th September 2009

The property market could be firmly on the rise as reports show house prices rose at their highest rate in the last five years in August.

New figures from the Land Registry show house prices increasing by 1.7% to £155,885 in August which is the highest monthly increase since 2004. Prices have increased now for the fourth month in a row and mortgage activity increasing.

The tables seem to have turned over the summer with demand now far outstripping supply as cautious homeowners keep their houses off. There has been a steady increase in buyer confidence in recent months, with potential homeowners hoping to snap up a bargain and this is pushing up the prices.

If you are selling your house then this is great news as there are more potential buyers out there. However, be prepared to receive offers as many buyers are still hunting for a bargain. If you set a minimum price in your head and price your property competitively then you should have no problem selling and moving on up the ladder.

Any concessions that you have to make in your own sale should be mirrored the price you pay for your own purchase because you too will have increased bargaining power. As the value of the new property will undoubtedly be greater this should mean that you benefit to an even greater extent than your purchaser.

Ironically even if you are a first time buyer there are positives to rising prices. With increased interest and stability in the housing market comes an increased appetite for lending as mortgage companies see less risk in first time buyers and existing homeowners alike in a rising market. This means that it should become easier for first timers to get a mortgage and the continuing low interest rates should help to keep your monthly repayments down if you are on a tracker rate.

So with some real positives filtering into the housing market the other big dilemma will be whether to consider a fixed rate mortgage in anticipation of the base rate increasing. Our own belief is that base rates are unlikely to gallop ahead in the near future and so tracker deals look good value in comparison with more expensive fixed rates.

Whatever type of mortgage you decide to choose, our expert advisers are on hand to help you through every step of your mortgage application and to make sure you get the right mortgage to suit your needs.

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