U.K. house prices rose to the highest on record in May, driven by significant improvement in mortgage availability, data released by the LSL Property Services/Acadametrics showed Friday.
House prices increased 0.4 percent from a month ago to GBP 233,061 in May. On a yearly basis, prices were up 2.7 percent, but slower than the 3.4 percent increase in April.
"Schemes like Help to Buy and Funding for Lending have acted like a steroid injection for the mortgage market and made it markedly stronger than last year," said David Brown, commercial director of LSL Property Services.
However, Brown observed that the only real solution is a sustained improvement in the wider economy which will help increase the supply of mortgage finance and improve demand for it.
The Funding for Lending was launched in July 2012, offering funding to banks and building societies for boosting their lending to the real economy.
Brown said more needs to be achieved to help banks lend to new buyers, as a strong improvement in first-time buyer lending is the crucial catalyst for a full market recovery.
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