The recurring news of price increase in the UK housing market is a focal topic for all those in the industry, most especially, buyers who would like to get onto the property ladder. News of a 10% price increase since last month and a overall 3.8% annual increase comes as a slight ‘kill joy’ to subdue the optimism that followed the government’s announcement of the ‘Help to Buy‘ scheme (phase 2). It seems that the scheme has increased the demand for housing. Basic economics infers that where there is great demand and low supply, it is inevitable for prices to go up. We can actively see this economic theory in the property market.
The main regions that skewed the percentage price increase were; London (8.7%), East Midlands (3.8%) and West Midlands (3.5%). See info-graphic below for other regions.
These figures are no surprise, as London is the capital and home to just over 8 million people. Moreover, as London is bursting at the seams, a great number of Londoners are venturing to surrounding regions such as the East/West Midlands and the South. Having said all of this, it has not deterred many buyers from wanting a property in London.
Rental prices are also on the rise in Great Britain (1.2%). Which is expected as it is the affordable housing alternative for many. This may be great news to Landlords/ladies, but we can’t say the same for those who are renting and really want to get onto the property ladder but are ‘stuck’ in renting because of these price increases. See our post on whether to rent or buy.
From the buyer’s perspective, people that are only able to source smaller deposits (5%) are apprehensive about taking advantage of the Help to Buy scheme, for fear of being disadvantaged by the increase in house prices. The Help to Buy scheme is limited to properties amounting up to £600,000. This seems fantastic when one looks at the Office of National Statistics for the average price of a home in the UK – £247,000. However, buyers who desire a property in London are looking at an average of £544,000 – and the big question for them is: Is the Help to Buy scheme really worth it?
A few tips from us at NeedAProperty
Fantastic properties under £600,000 do exist! The Help to Buy Scheme has set a cap at £600,000. All hope is not lost, as on our website we have endless lists of properties for sale in London and other regions that are reasonably priced below that limit. Visit our us now to do a quick search for properties in your desired area and set your price limits for a tailored result!
Source a larger deposit. It would be beneficial for you to source a larger deposit if you are financially able to do so, as it will reduce the financial burdens in the long-term.
Check out our ‘finding the right mortgage‘ post. You will find essential advice on securing a mortgage with a lender that will take your financial situation into consideration.