The UK’s housing market has been growing at an incredible rate in the last year, as hundreds of thousands of first-time buyers shop for homes using the government’s new Help to Buy scheme.
New reports indicate that, contrary to conventional belief, the surge in housing and property prices isn’t just confined to London and the south-east. A new report from housing market research company Hometrack shoes that prices are up in over half of the country.
The surge in pricing has occurred in regions that have otherwise remained flat in terms of pricing for the past 10 years, the report states. House prices rose in 51 per cent of English and Welsh postcodes in the last month, with the average home price in the UK increasing 0.7% – a monthly rise not seen since April of 2007.
Hometrack director Richard Donnell called the recent pricing recovery “the greatest coverage of house price growth for almost a decade”. London still leads the country in home price gains, at 1.1%, with the south-east coming in second place with 0.9% monthly price growth.
Much of the housing market’s growth has been attributed to first-time buyers eager to enter the property market under the government’s Help to Buy scheme. Over the last year, more than a third more first-time buyers have made the decision to buy their own property, pushing the average first home price to just under £156,000.
Critics of the government’s policy believe that the rapid increase in the amount of first-time buyers could result in a dangerous housing bubble. The average price of housing has increased 9.4 per cent in the last year – an increase greater than any period of economic development since 2010.
Homebuilders have reported excellent profits, with supply shortages resulting in a huge amount of new developments across the country. David Cameron responded to concerns of a housing bubble by noting that prices remain significantly lower than they were during the pre-crisis real estate market boom.