House sales have reached their highest level in six years while prices rise as buyers take advantage of the government’s Help to Buy scheme.
The Second Phase of the ‘Help to Buy’ scheme enables first time buyers to get onto the property ladder by requiring small deposits. It also encourages lenders to increase mortgage loans consistent with the Help to Buy scheme.
However, there is still a supply and demand issue – demand is high while supply is extremely low. Consequently causing a house price increase, like the House Price bubble BBC Panorama documented on last night’s program.
The Royal Institution of Chartered Surveyors said that surveyors were involved in the sale of more than 20 homes in the third quarter up to October, making it the highest average since February 2008. This is consistent with what was shown on BBC Panorama with agents having 300 potential buyers viewing one property in the space of 3 hours!
— Need A Property (@needaproperty) November 11, 2013
October 2013’s figure of house sales is 23.2% higher when compared to the same month last year. Despite the number of homes on the property market for sale and all the ‘new builds’, they are still not enough to keep up with the demand. This dichotomy is what is causing the House Price Bubble that we see in the current market and ought to be addressed!
A ‘House Price Bubble’ was inevitable with the introduction of phase two of the Help to Buy scheme. Nonetheless, we can see the fruitfulness of the scheme with David Cameron announcing yesterday that it has had an ‘extraordinary start’, especially in pushing forward ‘social mobility’. He rounded his talk off with a warming anecdotal story of 75 families a day joining the five per cent deposit phase in its first month.
Will the house price bubble ever pop? We’ll just have to wait and see!