What do you think the main drive behind the housing market recovery is?
This year, house costs are forecast to exhibit a 2.9% growth, meaning that the average home in the UK will reach a historic high value of £225,000, the Centre for Economics and Business Research (CEBR) predicts.
House prices in London are seen to outpace national average growth, increasing by 6.9% in 2013. Next year, a typical UK house is expected to cost £234,000, or 3.9% more than in 2013.
According to this article I came across on the CEBR website, current developments on the local house market are driven by fundamental factors such as demographics and the economy rather than speculation. The growth in house prices is dictated by economic improvement, Britons’ need for homes, and the facilitated access to home loans, CEBR said, noting that fears of an impending housing bubble are “premature.”
Another factor propelling growth in house values is the launch of the government’s Help to Buy Scheme for homebuyers. The scheme, rolled out three months ahead of schedule, will make up to £12 billion worth of mortgage guarantees available to Britons, further bolstering home finance availability.
CEBR also predicts that the housing market recovery will likely extend outside the two top markets, London and the South East, where prices will surge by a respective 43.5% and 27.7%, to other regions. In the East of England and Scotland, for instance, house prices will be impacted by the economic recovery and the national policy measures, providing an increase in home values of 27.6% and 27.5%, respectively. The rise in home values will even spread to Northern Ireland, where they have been on the decline since the third quarter of 2007.