Buyers Who Believe Prices Will Drop Increases Slightly
The number of Britons who belive that house prices will continue to rise appears to be on the wane according to a recent poll carried out by the Halifax. Overall 52% of those who took part in the poll believed that prices would continue to rise with only 8% believing that prices wojld come down. The figure is down from it's peak of 60% in June 2013. This comes despite the Halifax house price index showing that house prices rose in January by 2% bringing the average cost of a home in Britain to £193,130.
There are signs that prices may be creeping up again in the short term because the number of new homes being built is still well below what is needed to satisfy demand. There is also the stamp duty changes to factor in to furure house price increases as this is likely to have a positive impact. All in all there are still too many buyers chasing too few homes which only results in house price inflation. The number of new housing starts was down in the quarter to January by 10% which is not good news for the government who is pushing too get as many houses out of the ground as possible particularly with a general election looming. It will be keen to tell everyone how the situation on the ground is improving with regards to new houses being built.
With interest rates remaing low at record levels there is good reason to think that huse prices will go higher in the short term particularly with an ever growing population in Britain. It is not just house prices that are going up. The cost of renting has also jumped over the last 12 months and has not gone unnoticed by Ed Milliband who has said that he wouls introduce rent controls in order to halt thr steep rent rises that tenants are facing. This would be a popluar policy amongst The UK's tenants who are now spending a larger proportion of their income on rent than previously