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Housing is Heating Up

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Fri 16 Oct 2015

Housing is Heating Up

The housing market is heating up again, with residential property transactions at an 18-month high, mortgage approvals at the highest level for 15 months and demand from buyers, is at an 11-year high.

This is fuelled by greater political stability, a strengthening economy, low mortgage borrowing rates, rising employment levels and government housing schemes such as Help to Buy.

But while there is impetus to buy right now, the supply of housing coming onto the market remains low, with the Royal Institution of Chartered Surveyors reporting that housing supply has tumbled to its lowest level since records began in 1978.

This acute shortage of supply is bad news for the market, it will almost certainly push house prices even higher, which may further prompt speculation that the UK is fast approaching a property bubble.

The Land Registry figures show: "The region with the most significant annual price increase is London with a movement of 9.2 per cent. Yorkshire and The Humber saw the lowest annual price increase of 1.4 per cent. The North East experienced the greatest monthly price rise with a  movement of 3.0 per cent. Yorkshire and The Humber also saw the largest monthly price decrease with a fall of 0.9 per cent. (June 2015)."

Thankfully, the Government seems determined to prevent prices spiralling. It recently took a major step towards hopefully solving the housing crisis in the near to medium term by announcing measures to make it easier for developers to speed up the delivery of new homes, as part of its Productivity Plan.

This attempt to form a coherent housing strategy to tackle this growing problem by making development more sustainable will be supported by a new All-Party Parliamentary Group for Housing and Planning, which will aim to produce an initial set of recommendations to Government on how to boost house building in the UK later this year.

If solutions can be found and we get closer to building the 250,000 or so homes required annually to address the UK's housing crisis this would enhance the stability of the property market which is in everybody's interest.