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What does the latest property news mean for you?

The UK's housing market is changing rapidly. House prices in London are constantly rising. Industry experts fear that this rise is unsustainable, but as yet the market is still buoyant.

Property market fluctuations

Are rising house prices a good thing?
If you are investing in a substantial property that is well built and will stand the test of time, then you will always find it easy to sell in the future. Properties that are over-priced and not very well constructed will prove to be a riskier proposition. Many developers offer 'safe' investments and City & Country's new homes North London are a good example.

Interest rates go up and down
Another factor to bear in mind that mortgage rates may be on the increase. The Governor of the Bank of England gave a strong hint about a proposed rise in rates at his Mansion House speech.

If you are thinking of taking out a mortgage then you should be aware that the authorities want to make it more difficult for house buyers to get a mortgage that may stretch the family income to breaking point.

Also, at the Mansion House dinner, Chancellor George Osborne stated that "if the Bank of England thinks some borrowers are being offered excessive amounts of debt, they can limit the proportion of high loan to income mortgages".

House prices are still rising
Research by the Nationwide Building Society shows that house prices have risen by 11.1% since last year. These rises are mainly prevalent in London and the South East. Many critics have blamed the government's Help To Buy scheme as the reason behind the market's current rise but the scheme only offers finance for homes up to £600,000 and many London homes are in excess of this price tag.

Also, the equity loan portion of the Government project will only help those who invest in a new build.

Do your sums if you are thinking of buying a house
New rules introduced by the Financial Conduct Authority (FCA) in April mean that when you apply for a mortgage your ability to maintain your monthly repayments will be investigated more thoroughly than ever before.

It's a mistake to invest in a home if your income will cover your bills but not your lifestyle.

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