Research shows that house prices have risen in the last year with forecasts for the rest of the year being revised upwards.

Figures released by the Office for National Statistics showed that the average buyer paid 2.9% more for a house in May than they did at the same point last year. This rise was even higher for first-time buyers with the average property for new buyers rising by 4.1% during the last 12 months.

This has caused estate agency chain Savills to up its forecasts for 2013 from 0.5% to 3.5% with London growth predicted to be around 6% for the year. Across the UK, the firm now expects house prices to have grown 18.1% by the end of 2017.

“A combination of low interest rates and stimulus measures means there is capacity for improved price growth over the next three years or so,” said Lucian Cook, director of Savills residential research.

“But it comes at the price of later price growth in 2016/17 when interest rates are expected to start rising.”

Post courtesy of Mortgage Solutions.