Last month, house prices went up by 0.5%. Shockingly, this is the 9th rise in a row! Houses are nearly £11,000 more expensive than they were last year, hitting the highest level they’ve been for 5 years. Houses rise by approximately £200 every day, but what’s to blame? Some people blame the new Help to Buy scheme, designed by the government to help people with lower deposits get a mortgage. However, politicians have already dismissed these claims, saying there will be no housing bubble and that people who think that need to “get out more”. Read on to learn more:
The Halifax house price index shows that the typical family home now costs £170,733, which is up from the £160,000 mark in September last year, and the highest since it was slightly more at £171,857 in 2008.
According to one director of an estate agent, the property market is much stronger than it was a year ago for consumers, who are grabbing their chance now that loans are easier to get. The figures take into account two schemes that have helped people get their hands on low deposit mortgages; the Help to Buy scheme and Funding for Lending. Even so, many economists, property experts, and even some MP’s have criticised these schemes, claiming that they would cause a housing price bubble as mentioned earlier.
Chancellor George Osborne is adamant that the schemes won’t cause a housing bubble, and says that they will now be monitored yearly instead of every 3 years.
It seems that demand has risen much quicker than supply, which has maintained even more pressure on prices. Perhaps the rise of house prices is a good thing, with the amount of equity in a person’s home increasing, allowing more to sell their property when the time is right. If you’re looking to sell your house fast, this could be good news for you!
Out of the 5.1 million people who intend to buy a home in the next year, 1.6 million of them plan on using the Help to Buy scheme. The scheme is open for all people looking to buy up to £600,000 property. Some people interested in the scheme have many misconceptions about it, sometimes believing that the Help to Buy scheme helps you to get a bigger loan or protects you if you can’t make a payment, when in fact that isn’t true! Help to Buy simply allows people with less deposit to get a mortgage. Nothing more nothing less.
It isn’t clear what the reason to blame is for the rise of house prices, however, the market has always changed and continues to change daily. Some people even claim that the scheme is nothing but an election ploy, and that could very well be true! However, tackling Britain’s housing problem properly might take more than a Help to Buy scheme. Perhaps there should be tighter restrictions as to who is allowed in the UK, and a building program with plenty of goals? This would certainly provide adequate accommodation for existing citizens. Mr Cameron could have some more tricks up his sleeve for us yet. Should we fall for them?