Is Confidence Returning To The Property Market?
There were several pieces of positive news recently regarding the housing market.
Firstly, demand for housing has hit a three-year high, driven in part by the Government’s Help To Buy scheme, according to the RICS. This has helped generate renewed interest and confidence in continued price rises. Recent surveys of industry professionals show broad optimism about future prices in every part of the UK except Northern Ireland.
Whilst the supply of houses for sale rose marginally in April, this was outpaced by rapidly rising demand, with reports of estate agents selling properties in less than a day and in some cases, even starting to run low on stock.
Secondly, the level of mortgages granted to first time buyers is up almost 20% to its highest point in five years, including an increase to those with a 10% or less deposit.
Although rates have been highly competitive for some time, it has still been difficult for those at the bottom of the ladder to secure a suitable loan, but it appears that the Government scheme is finally trickling down to those who are most in need.
Finally, the Office For National Statistics reported that UK households are feeling less burdened by their mortgages in the aftermath of recession. Only 13.6 per cent considered their property debt to be a heavy burden, compared to 15.2 per cent in 2006-8, despite rising costs of living and the pressure on real wages. Those most likely to feel burdened were lone parent households, whereas married couples without children were the least likely to be concerned.
So it looks like the market has acquired some increased confidence, which is the pre-requisite for a modest upturn. With rents continuing to rise, broad price stability, and better access to finance, many households are deciding that this is a good time to get on with their lives and make a positive move.
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