by Mark Johnston
A Rise in Sellers Asking Prices!
It seems that renewed confidence in the housing market and the ability to take on a long term mortgage commitment give more buyers the spur to enter the market or trade up.
Miles Shipside, director of Rightmove, the property website, said: “Consumer confidence is key to the housing market and on this front there has finally been a year of minimal bad news, with a reasonable amount of good, after four years of pretty consistent doom and gloom.”
Higher confidence, increased mortgage availability, lower rates and new Government’s schemes such as NewBuy and Help to Buy, which give first time buyers with small deposits a lift on to the property ladder, have all combined to encourage more housing market activity.
Lenders, estate agents and property websites have all been reporting signs of surging activity in the housing market.
Martin Ellis, housing economist at Halifax, suggested that the confidence boost is ‘partly due to house prices being stronger than expected in the first half of the year’.
Currently, house prices are 18 per cent below 2007 levels in real terms.
According to property website Rightmove, home sellers’ asking prices have hit record highs for three months in a row now.
Recent data shows that new sellers are asking around 4.8 per cent more for their homes than they were a year ago.
Earlier this week, property website Zoopla estimated that homes have typically added £65 a day to their value over the last three months.
Figures reveal house Prices rose by 0.3 per cent month on month in July to reach a new peak of £253,658 on average.
Therefore some experts expect prices to rise 3 per cent to 4 per cent annually over the next four years and to be back at their 2007 high in cash terms at the end of 2014.
A recent Halifax study also found that one in four people expect house prices to lift by at least 5 per cent over the next year.
The Royal Institution of Chartered Surveyors (RICS) thinks prices could rise by as much as 4 per cent across this year, rather than the 2 per cent increase it had previously pencilled in.
However with house prices rising at the fastest pace for more than three years, fears have been sparked about new bubble that could price a generation out of the property market.
Ross Walker, UK economist at the Royal Bank of Scotland (RBS), said: “There is a risk we recreate past mistakes. If all the Government is trying to do is give a little nudge then the effect’s will be largely minimal. But if they are saying ‘interest rates will be at record lows for some time and borrow as much as you can’, well, that sounds very familiar.”
Business secretary Vince Cable, added “We must not risk returning to the problems of the last decade when housing got out of control.”
In conclusion then, despite fears of another property bubble currently confidence in the property market is riding high.
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