Transactions are rising again in London, UK house prices are climbing £100 a day according to the Telegraph. The election result and a perceived shortage of housing are seen as reasons why house prices are set to rise through the summer of 2015.
As the dust settles on a surprising election result, the housing market is once again dominating the headlines in the papers with reports that house prices are rising across the nation. Even with political uncertainty in April, house prices were reported to have been rising at a rate of £100 a day on average.
Recovery Underway In The North East
The house price boom is set to reach all corners of the UK with the North West of the country and even the hard-hit North East reporting house price increases of just over half a percent for the month. The figures were slightly behind the national average of 0.8% but come as a welcome boost for many homeowners still struggling with the gulf between prices paid for homes immediately following the housing market crash and now.
In some of the worst hit areas such as North Wales a glance at house prices shows that some properties are worth more than £10,000 less than they were in 2007 even with recent climbs in house prices taken into account.
Summer House Price Boom Would Be A Welcome Relief
A summer house price boom will come as a welcome relief to those in negative equity even if the price of many properties will be pushed up and out of reach of first-time buyers. Here too though there is good news in the new government’s confirmation that the ‘Help to Buy’ scheme will continue as well as Right to Buy which should encourage more people to buy homes.
One thing that is unlikely, however, is the government introducing measures to meet the need for affordable new housing in the UK. To meet current demand, most analysts say that the country needs to build 240,000 houses a year.
The Conservative election victory has been welcomed by the vast majority of people involved in the property industry even though their pledge didn’t include a commitment to building enough houses.
Benham & Reeves Residential Lettings MD Anita Mehra, said “talking to people, many said that if Labour was to come into power and taxes like the Mansion Tax were imposed, they would sell and move their assets out of London.
We also encountered foreign investors in Asia who were equally concerned and were hesitant to invest in the UK. A Conservative win is the best thing that could possibly happen to the private rental sector and to the housing market.”
Yet foreign investors are seen as one of the reasons why property prices in some areas of London have risen well out of reach of all but the wealthiest members of society and this has had a ripple effect on prices in surrounding areas.
The Only Way Is Up For UK House Prices In The Longer Term
Despite a pledge to build more houses from the Conservative Party, the prospect of houses becoming cheaper is at best unlikely. There is currently little incentive for the government to alienate the millions of people who are relying on houses to fund retirement and provide nest eggs for the future. Many of these people happen to be the ones most likely to vote.
While this summer may be a boom time for the property industry it is increasingly evident that there is only one way for prices to go in the long term and that’s up.
Posted on: May 13, 2015