UK Property Prices Continue To Increase
There could be more good news for UK property investors over the coming months as projections for the rest of 2014 indicate that property prices are set to rise even more, providing the potential of greater Return On Investments (ROI).
Since the UK housing market crash in 2008, UK property prices slumped and were depressed for some time afterwards due to uncertainty in the economy, however, the end of 2013 saw the UK property market spring back to life.
According to data from the Halifax House Price Index (HPI), there were over 1 Million residential property transactions in 2013 for the first time since 2007, and residential property sales increased for the ninth month in a row in December 2013, 30% higher than in 2012.
The data from Halifax is great news for property owners and shows that the UK property market is well and truly back on its feet. So, if you’re a property investor who is planning on investing in property in 2014, you can expect to see property prices continuing to rise.
2014 started with residential property prices on the increase and more people buying and selling. The introduction of the 2nd phase of the Government’s Help-To-Buy scheme in October 2013 allowed property purchasers to get 95% Loan-To-Value (LTV) mortgages, heralding the return of the first-time buyer to the UK property market. Banks and building societies have finally been able to start lending as a taxpayer-backed guarantee on mortgages came into effect.
Santander and Barclays are set to join the panel of lenders supporting the Help-to-Buy scheme this year, expanding the number of lenders offering 95% mortgage loans.
According to data from the Nationwide Building Society’s monthly House Price Index, UK property prices were up 0.7% in the month and 8.8% in the year to date. That means the average price of a typical residential property in the UK is now around £176,500 (GBP).
This is good news for the UK economy in general and very good news for prospective property investors, who want some amount of capital appreciation on their investment assets.
As UK property prices increased during 2013, it restored a degree of confidence back in the property market, encouraging more people to buy and sell.
The apparent buoyant economy means people are finally starting to feel like they have more disposable income again, allowing them to get their finances back on track.
The Bank of England base rate is still holding steady at 0.5%, but there is speculation that it could rise in the near future.
Mark Carney, the Governor of The Bank of England (BoE) has made it clear that the BoE won’t be making any rash decisions, but the threat of higher interest rates could mean that property investors should be buying now in order to grab the last of the best fixed rate mortgages currently on offer.
The lack of available property coming to market is outweighed by the demand for property from willing buyers. There aren’t enough houses being built to meet the current housing shortfall, and whilst this is a hot topic on the political agenda, the media coverage could be driving house prices up even further.
If you have plans to invest in property this year, whether you’re a first-time landlord or experienced property investor looking to boost your investment portfolio, it might be worth starting the hunt now before prices soar even higher.
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