Positive signs of growth are starting to show within the housing market in the UK currently, and house prices are rising again.
Although at the moment the rise in house prices is relatively small, there has been a year on year increase and this is transferring into increased confidence in the housing market.
There are a number of reasons for these shoots of growth. In August 2012 the government introduced a new scheme called “Funding for Lending”. This gives banks and building societies an opportunity to borrow cheaply from the Bank of England when they sign up to the scheme.
In exchange for their cheap rates of borrowing, the banks and building societies who have signed up to the scheme agree to make more funds available to lend to small businesses and people looking to borrow for a mortgage. The statistics have shown since the start of the scheme, more of the money has been lent to people taking out mortgages, rather than small businesses, which has helped to kick start the housing market and may be one of the reasons for the increase in house prices.
Another scheme the government has introduced to boost the market is the NewBuy Scheme. This enables people to buy a new build house with only a 5% deposit. The NewBuy scheme is aimed towards people who are looking to buy their first property or people who already own a home but only have a small deposit.
This should have a number of positive repercussions in the economy. It will boost the construction industry and enable more new houses to be built to meet the rising demand and it will also boost the housing market as more people will be able to move who couldn’t before. This may also be a reason behind the increase in house prices.
Many people talk about a ‘buyer’s market’ or a ‘seller’s market’ but the increase in house prices look set to be good for both buyers and sellers.
Although house prices are higher, which could be seen as a negative thing for buyers, there are many more option open when looking for a mortgage, which includes lower interest rates. Buyers will benefit from the increase in prices and the economy will benefit from a more buoyant housing market.
Experts say that in 2013 house prices will remain stable, so with the schemes available to you this year, it may be a great time to consider buying a property.
If you have any property questions, please call us on 0800 142 2775 or reply to this email and we will be delighted to help you (there is no charge for initial telephone discussions).
Author: Nicholas Jervis