British House Prices Picking up Pace

Wednesday, 19 March 2014

The wettest winter in 250 years hasn’t put people off buying property in Britain. According to Halifax, British house prices jumped in February: marking the fastest monthly rise in property prices since 2009.

The boost came as house prices rose by an average of 2.4% last month, compared to a 1.1% rise in January. The bank believes that the influx of first time buyers into the market, as well as falling unemployment rates and a growing confidence in the economy, are responsible for the surge in house prices.

Over the past few months there’s been a lot of talk of a housing bubble developing in London, but the latest figures from Hometrack show that the increase is now spreading beyond the M25. More than half of the homes sold in England and Wales over the past year have shown a price increase, and there’s also been a leap in house prices in areas where the market has been largely stagnant for the past decade.

Although more people are living in rented properties than ever before, Brits still have a huge interest in owning their own property. The price of a starter home has risen over the past year to £156,000, with many first time buyers using government schemes to get themselves onto the property ladder.

Demand is currently outstripping supply, with the building industry reporting huge profits due to an increase in new housing developments. In Scotland, the number of people looking to buy their council house has jumped by a whopping 50%. As more people jump onto the property ladder, one thing’s for sure: there’ll be more demand for home insurance policies.

While the price increase is great news for people who are planning to sell, there are some concerns about a new housing bubble forming. At the moment the situation is being monitored closely by the Bank of England, which has already been forced to downplay such worries. David Cameron is also quick to point out that British house prices are still a lot lower than they were during the pre-recession boom, suggesting there’s a long way to go before we reach crisis point.

Sources:
1.
http://uk.reuters.com/article/2014/03/06/uk-britain-housing-halifax-idUKBREA250FQ20140306 
2.
www.theguardian.com/business/2014/mar/03/housing-market-rises-beyond-london-south-east-property-price  
3.
http://www.independent.co.uk/news/uk/politics/more-people-now-rent-privately-than-from-councils-or-housing-associations-9155544.html  

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