UK House Prices Likely to Continue on Path of Increase
UK house prices are expected to continue their torrid pace upwards, according to the Halifax. House owners are recognising the unique situation before them and taking advantage of the low base rate which is expected to continue now through possibly much of 2016. Many house owners are obtaining remortgages with super low fixed interest rates.
The increase in house prices took a breath in last month. They fell by the marginal amount of 0.2% during the month of November. This contradicts the past three months in which house prices have increased more than 1.3%. Demand for housing has not diminished, incomes are climbing, and overall optimism regarding the UK housing market is as strong as it has ever been since the economic crisis of 2008.
Martin Ellis, Halifax housing economist, commented on the current climate of the UK housing market, saying: “Solid economic growth, rising real earnings and falls in already very low mortgage rates have combined to stimulate housing demand this year.”
Ellis added: “The increasingly acute imbalance between supply and demand is causing prices to rise at a robust pace. A situation that is unlikely to reverse significantly in the short term.”
In the opinion of many close to the UK housing market, house prices will likely continue to increase at this pace until demand begins to realign with the current level of supply available for purchase.
Brian Murphy with Mortgage Advice Bureau (MAB) commented on the current low mortgage rates, saying: “There was a significant increase in mortgage activity in the third quarter of 2015. This spike in demand has been driven by record low mortgage rates – a result of increased lender competition and the continually low base rate.
“More and more borrowers have been fixing their rates in order to secure the best possible deals, with the proportion opting to fix climbing above the 80% mark for the first time this year. Such attractively priced rates won’t be around forever, but those in a position to take on a long-term fix will benefit from a longer period of savings.”