UK housing market sees encouraging “green shoots”

By | News & Politics
Schemes by the Government and the Bank of England have been attributed to the rise in buyer confidence. (Photo by: Alex Liivet/ flickr.com)

The three months leading to May 2013 saw a record increase in the number of house sales across the UK, which reached their highest level since January 2010, according to the Royal Institution of Chartered Surveyors (RICS). The rise in sales is expected to continue throughout the summer.

This follows a report by Nationwide Building Society that the UK’s housing market is “gradually gaining momentum”, despite a 0.4 per cent increase in house prices in May. “With the UK returning to growth in the first quarter of 2013, the improvement in wider economic conditions may also be playing a role in boosting sentiment,” said Robert Gardner, Nationwide’s chief economist.

The Government’s Help to Buy scheme is largely believed to be a major contributing factor towards increasing buyers’ confidence. The Bank of England’s expanded Funding for Lending Scheme has also given the housing market a much needed boost, ensuring easy and cheap credit availability for buyers.

“May was an interesting month for the housing market,” stated Peter Bolton King, global residential director at RICS. “More people decided to get out there and view property and more transactions went through than in quite some time”.

“Most encouragingly of all, though, is that stability is not confined purely to London and the South East, as has been the case, but is now starting to extend to areas right across the country. There is still a very long way to go until we see a full scale recovery but green shoots are beginning to sprout,” he added.

RICS also reported that the number of house sales in Wales saw an impressive leap to its highest level in six years. Tony Filice, RICS Wales Residential spokesperson said: “Demand in the first-time buyers market is now exceeding supply, leading to full prices being achieved”.

“This is already filtering through to the middle market and will hopefully filter to the upper levels in due course,” he added. “Confidence is high with the general public who feel that now is the right time to buy, complimented with the right choice of mortgage product at favourable rates.”

This coincides with news that the number of individuals claiming unemployment benefits fell to a two-year low in May, providing a further boost for Britain’s economy. According to the Office of National Statistics (ONS), the number of claimants fell by approximately 8,600 last month, which is its seventh consecutive monthly drop. The ONS also reported that total pay rose by 3.3% in April.

Such boosts to UK consumer and investor confidence have led to an encouraging rise for the British pound, which has risen to a near four-month high against the dollar, reaching a $1.56 mark, also hitting a three-week high against the euro.

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