The monthly report says that house price growth remains stable across most of the UK, although prices in London are increasing faster than the country average.
The year on year increase reflected growth of 2.8% in England and 6.2% in Wales, which were offset by declines of 1.2% in Scotland and 0.8% in Northern Ireland.
Annual house price increases in England were driven by a 6% rise in London and a 3.6% increase in the East Midlands.
Excluding London and the South East, UK house prices increased by 1.4% in the 12 months to April 2013 and on a seasonally adjusted basis, UK house prices increased by 0.4% between March and April 2013.
In April 2013, prices paid by first time buyers were 4.7% higher on average than in April 2012. For existing owners prices increased by 1.9% for the same period.
Brian Murphy, head of lending at the Mortgage Advice Bureau said that while rising house prices are great news for home owners, buyer optimism may become clouded by concerns of a housing bubble.
‘First time buyers have been hit hardest by the increasing costs paying nearly 5% more on average in April 2013 than last year, compared to a 2% rise for existing owners. Higher house prices mean overcoming bigger barriers to access the market, locking out anyone unable to raise a substantial deposit,’ he explained.
‘However, cut price mortgage deals do offer hope as rates continue to fall across two, three and five year fixes. Help to Buy has also had a successful start, reaching 4,000 reservations in its first two months. Anyone nervous about inflated prices should seek specialist advice from brokers, who may be able to track down deals to tackle any financial blockade,’ he added.
David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains, believes that the figures are very good news for the industry. 'The housing market is crackling with electricity at the moment. Help to Buy and Funding for Lending have increased the voltage in the mortgage market, which has energised first time buyer lending and sparked the house purchase market back into some sort of life,' he said.
'Rates on first time buyer mortgages have fallen to an average of 4.31%, and banks are more willing to lend to borrowers with deposits of 15% or less, borrowers who didn’t have a look in 12 months ago. While lenders are still cautious, they are at least cautiously optimistic, which is good news for prospective buyers,' he explained.
But he cautiones that some significant obstacles to a full recovery still remain. 'Deposit requirements are still relatively high, we have stunted wage growth and lenders capital constraints are holding back more ambitious lending,' he said.
He also warned that if Help to Buy does indeed increase the supply of lower LTV mortgage money and in turn increasing demand, this may inflate house prices. 'This would make life harder for some first time buyers who are finding it hard to save a suitable deposit. New buyers will be the vital foundation of the housing market’s recuperation from the blows of the financial crisis, which makes the recent improvements very encouraging indeed,' he added.
