The average cost of a home in Britain now stands at £170,000 bringing it to the same level not seen since 2007. The market has seen a spike in prices over the summer with buyers looking to take advantage of the various schemes that are being offered by the government and the Bank Of England. House prices are up 6.2% so far this year and the number of house sales has increased by 7% this year and is 19% higher that they were twelve months ago.
The Bank Of England has refuted claims that we are in the grip of a property bubble because the market taken as a whole across Britain is only showing signs of recovery. If London is taken out of the equation house prices are only rising at a modest level and there is nothing to be concerned about.
In the meantime the Chancellor George Osborne has decided to bring forward the Help To Buy Scheme from January 2014. The scheme will become available this week and this will probably push prices up further. However many people feel that this is not helpful as it will just push prices beyond the reach of most families. However others feel that we should help people get on the housing ladder as it is almost a right in the UK. It’s ok for people that are sitting in their nice big homes watching prices shoot up whilst working families are forced to rent because they don’t have the deposits to buy. Atleast this levels the playing field a little.
Flagship Policy Brought Forward
The conservative government has announced that is it going to bring forward it’s flagship policy by three months. In what is being blamed for the surge in house prices the scheme is currently only available for buyers of brand new homes the second phase which will allow buyers of second hand homes will now be rolled out next week and not in January 2014. The government has been criticised for creating another property bubble which will push prices out of the reach of the very people it is trying to help.
The government mortgage backed scheme will help fund £130bn of lending and will also see the state owned lenders get involved with the scheme. The government has set aside £7bn for the scheme and many commentators are concerned that phase 2 of the scheme is going to push prices to unsustainable levels over the next couple of years. Unless new homes are built to satisfy the demand it is difficult to see what else is going to happen.