UK Housing Market Showing Signs of a Subdued Period
The growth in house prices in the 20 biggest across the UK has reached new heights. They have now increased by more than 5% annually for the first time in more than a decade. However, even though house prices remain hot, there are new signs of a possible cool-down within the housing market currently taking place.
London continues to set the standard for big increased in house values, followed by Bristol and Cambridge. House prices in the capital city have now risen more than 16% in the past year, topping out at an average of £402,800. The average house price in London is now at a level which is 30% higher than its last peak in 2007.
Hometrack has recently released data indicating momentum of house price increases within the housing market is slowing down. One of the primary reasons for the slowdown is lack of demand within the market.
Richard Donnell of Hometrack, commented on the increase in house prices and new affordability tests new house buyers are taking part in, saying: “Whilst mortgage rates remain low, new mortgage affordability tests and loan to income caps are impacting on the ability of marginal buyers to access the market, especially in the higher value markets such as London.
“On top of this, concerns over the impact of the global economy on the UK’s economic outlook are likely to come more to the fore.”
Demand within the housing market is expected to remain at a subdued level until the end of the first quarter of next year for not only the purchase of houses, but remortgages as well.