South-east Housing Market Leads Wider Economic Recovery – Again!
Homeowners in the South East look set to benefit first from the ‘green shoots’ of economic recovery, according to recent studies of the housing market. The effect of Government-backed schemes to boost lending is already underpinning a steady increase in house prices, with the country’s most prosperous region once again leading the way.
Data from the leading mortgage lender, the Halifax, indicates a clear momentum in the market, with average UK house prices up by 3,7% on a year ago – the biggest rise since September 2010, according to this article in The Telegraph. These statistics mask what one analyst has called a ‘game of two halves’ however, with prices still falling in some regions. As has been the case in recent decades however, the south-east has outperformed all other areas, getting off to a flying start and handling the bulk of the increased market activity.
What Starts In London Spills Over To … ?
Estate agents in parts of London report a “boom time” with (anecdotal) increases of up to 25% in the last year, according to the Financial Times. A members’ survey by the Royal Institute of Chartered Surveyors, however, reports that increases are not merely confined to London with its high-performing market driven by international buyers. Other regions, noticeably East Anglia, were also emerging strongly as market bottlenecks become unblocked as a result of easier access to finance – decreasing commute times into Liverpoool Street have opened up the further reaches of Suffolk and Norfolk to this effect. Experts at the Centre for Economics and Business Research estimate a 24.8% rise in in the South East and 25.7% in the East of England between 2013 and 2018.
House Sales Moving Once More?
The study points clearly to a buoyant housing market pulling the UK out of economic stagnation, with sales at their highest level for three-and-a-half years. The key to the uptick has been the Government’s decision to extend credit guarantees for first-time buyers to all home-buyers through the Help to Buy scheme, meaning the stimulus has not been confined to the bottom end of the market. Confidence was slowly returning to throughout the economy, and this was reflected in a desire to plan for the future. During May, “more people decided to get out there and view property,” a RICS Director was quoted, and this was translated into sales.
Praise for ‘Help To Buy’
Despite fierce criticism from some economists, there has been a positive reaction to Help to Buy from builders, homebuyers and investors alike. Stewart Baseley, Executive Chairman of the Homebuilders Federation characterised the launch as a ‘flying start” with 4000 reservations in two months proving “both the consumer demand for the scheme, and the developers’ commitment to it”, according to this article in The Guardian.
Jason Bradshaw from Cunningtons solicitors in Croydon said recently: “The problem is that the Help To Buy scheme seems to be creating a new housing bubble – without dealing with long-term issues caused the shortage of supply.”