This article by Eshe Nelson of Bloomberg on October 11th, 2013 tells us the rise of house prices in UK last month that influences first-time buyers back to the market.
U.K. house prices rose to a record
last month as easier access to credit drove first-time buyers
back to the market, Acadametrics said.
Values increased 0.5 percent from August to an average
235,534 pounds ($376,000), the London-based real-estate
researcher and LSL Property Services Plc (LSL) said in a report today.
London is leading the property-market recovery, with annual
house-price growth in the past three months more than double any
other region in England and Wales.
The second phase of the government’s Help to Buy program
was introduced this week, providing government-guaranteed
mortgages to buyers with smaller deposits. The acceleration has
fueled further concerns that the initiative may stoke a bubble.
Mortgage approvals rose to the highest in more than five years
in August, the Bank of England said last week.
“We’ve seen banks ease criteria on mortgages for people
with small deposits, which has opened the door to new buyers who
have spent years on the outside looking in,” said David Newnes,
director of LSL Property Services. “Demand has increased
significantly in a short space of time, and raced ahead of the
supply of homes.”
Nine of the 10 regions tracked by LSL recorded price gains
in the latest three months compared with a year earlier,
according to the report. London price growth was 8.5 percent,
compared with an average of 3.5 percent. In Wales, the pace of
the decline eased.
Nationally, house prices rose 3.8 percent, or
8,526 pounds, in September compared with a year earlier.
House sales rose 12 percent this year compared to 2012,
with the increase in transactions predominantly in the first-time buyer sector of the market, Acadametrics said.
LSL said concerns about a housing bubble developing are
overblown. While prices are rising, it is only a “fledgling
recovery,” Newnes said. “It is not a boom or a bubble. It is a
market correction, albeit a fairly quick one.”
The whole country will benefit from Help to Buy because it
supports buyers in the southeast, where prices are higher, and
in the north, where wage growth is slower, Newnes said. He added
that the program must be complimented by more house building so
supply keeps pace with demand.
Article Source: http://www.bloomberg.com/news/2013-10-10/u-k-house-prices-rise-to-record-as-first-timers-drive-demand.html
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