While house prices are rising, there is still a big difference in prices between North and South and, overall, a lack of supply to fulfill the rising demand. Trawling through the property listings and comparing data, it would be easy to get confused. According to the Royal Institute of Chartered Surveyors (RICS) the market is dead-locked with no new instructions. Buyer interest is hotting up, yet the flow of properties onto the market is not coming through. It also believes that the Government’s Help-to-Buy scheme has had an impact on the rental market, slowing it down.
The number of affordable homes completed in 2012/13 was down by 29 per cent from the previous year, contributing to a chronic shortage of homes which forces up rents and pushes house prices and deposits further out of reach of first time buyers, so will the Help-to-Buy scheme be enough?
Affordability has improved with the Government stressing that it is building 170,000 new homes across England to help cope with demand.
As of October 2013, the Government's Help-to-Buy scheme, which provides up to £12 billion of mortgage guarantees, will lift house price growth by increasing the availability of mortgage financing, says the CEBR (the Centre for Economics and Business Research). The Bank of England has said base rates will also be kept on hold until unemployment falls below 7.0%, suggesting rates are unlikely to rise before 2016. This aids stability and helps both businesses and consumers to plan as well as anchoring mortgage costs.
House prices in the North West are predicted to rise by around 1% making it a great time to buy in the area as prices seem pretty stable while confidence across the UK overall is increasing, particularly with the Help-to-Buy scheme stimulating the first time buyers’ market. As news of an economic recovery gradually gathers momentum, though, just how evenly spread across the UK is it and does it matter to regional buyers? Well, yes and no.