As the end of the stamp duty exemption nears, there has been an upswing in the number of homes being sold, according to recent figures released by the Land Registry. Some see this a sign that the market is finally improving as prices rose on an average by 1.1% in Wales and England during January.
Some of this growth is thought to be a result of first time buyers rushing to beat the end of the stamp duty exemption which is set to expire on 24 March. However, some experts contend that the growth is due, in part, to being able to more easily qualify for mortgages. This comes at the end of a four year period of a stagnant market.
Also, there has been an increase in high LTV (loan-to-value) mortgages which combined with low interest rates of late. These have added to the boost in the real estate industry. This is also felt to the because of demand on the side of the buyer.
Although prices are climbing once again, they are still lower than they were this time a year ago however the rise in January prices is indicative of a slow return of consumer confidence in the market. Unfortunately, many analysts don’t see this as an altogether positive thing as they feel rising prices cannot be sustained,
Tracy Kellett who is the managing director of BDI Home Finders states that this is bad for the market because prices are being artificially inflated by a severe lack of stock and interest rates which are at an historic low.
However, there appears to be sufficient lack of data to make a final determination as to whether or not the market is on an upswing. It is promising but the UK housing market is by no means out of the woods.