Strengthening UK economy boosts property prices over 2007 peak
June marked the 14th successive month in which the UK witnessed an increase in house prices, meaning that the average value of a UK property has surpassed its 2007 pre-recession peak. According to the latest Nationwide house price index, house prices climbed 11.8% between June 2013 and June 2014, with the cost of a UK house now averaging £188,903.
Although all regions of the UK have experienced an increase in house prices, the overall rate of increase varies across the nation depending on the region. London saw the highest annual change with an increase of 25.8%, and here in Wales house prices have increased by 9.3% despite the Land Registry’s recent report of prices continuing to fall in some areas of the country.
Growing buyer confidence
The figures suggest that as Britain’s economy continues to strengthen, there has been a boost in the demand for property nationwide. Here at CPS Homes, we have experienced first-hand the results of the housing market becoming a sellers’ market: the increased demand for properties means that we have been able to sell houses within a week of their coming to market, demonstrating the growing confidence of buyers as the economy stabilises.
There have been some concerns that the current demand for property may result in the housing market ‘overheating’, as prices and interest rates continue to rise due to a limited supply of properties, which could adversely affect housing activity as more people would be unable to afford the increasing costs. In London, however, some estate agents have provided evidence which suggests that buyers have become increasingly savvy with their property purchases, only making offers on properties within their price range and becoming less willing to pay increasingly high prices for properties worth a lot less. As such, buyers are taking their time and making fairer offers, leading to few properties selling for above their asking price.
The fundamental problem in the UK property market
Currently, the UK is operating within a market that sees demand far outstripping supply, and whilst this is good news for sellers, it means that first-time buyers are finding it harder to get their foot on the property ladder. With demand for properties growing, and the increase in prices reflecting the growing activity of the property market, the biggest problem facing the UK moving forward is the lack of available housing. This is a problem that officials in Cardiff have already taken steps to address, as demonstrated by the announced plans to create 1,500 new homes in North-West Cardiff, which would help the property market continue to thrive and encourage new buyers into the area.
If you’re currently looking to buy or rent a property in Cardiff, then you can contact our team at any of our office locations and we’ll help you with every step of the process. You can also keep up to date with the latest news, events and Cardiff area guides by looking through our blog or connecting with us on Facebook, Twitter or Google+.
