Real Estate Marketing & Beyond
The Bank of England is not concerned that a property bubble may be forming in the UK, but does intend to keep a close eye on things.
Just recently there have been worries that property prices are increasing too quickly, especially in London and the South East, but the Bank of England’s Financial Policy Committee has assessed the situation using certain factors such as house prices compared to income, activity levels within the housing market, and the cost of debt. It concluded that the market is under control, even though the recovery is picking up speed, but does intend to monitor the situation for any possible problems.
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The article in Propertywire pointed out that nationally house prices have increased by approximately 3.3% over the past twelve months, but in London the figure is closer to 10% with some areas seeing even more substantial increases. Areas such as Battersea, Wandsworth and Primrose Hill have seen price increases of 28%, 36% and 40% respectively, while price gains in more central London areas have not been so dramatic. In central London apartments are seeing larger price gains than houses, and sellers looking to trade up are choosing to move out of central London into other areas such as Battersea, Primrose Hill and Wandsworth. This has led to a shortage of suitable properties in some areas, which in turn has meant buyers have been forced to submit sealed bids, pushing up selling prices.
Just recently, the housing market in the UK has been helped by various government measures, and measures by the Bank of England designed to make it easier to borrow money. These schemes include Funding for Lending, and Help to Buy, of which a new phase will be introduced at that start of next year. While these schemes may have helped the ordinary buyer who is simply looking to purchase a home, prices in London are being pushed up by wealthy buyers from other countries looking for safe investments. In spite of increased activity levels within the property market, things still haven’t reached the peaks seen before the financial crisis.
This hasn’t stopped the Royal Institute of Chartered Surveyors from asking that the Bank introduce measures to slow the rate of mortgage lending once national house price increases exceed 5%, a request that was not well received.
