‘Lack of supply’ inflating house prices
A property expert has suggested that a boom in UK house prices is down to a lack of supply of properties.According to newly released figures from Nationwide, the average UK property is now worth £188,903 – higher than their peak in 2007.
In the North West, prices have risen 7.1 per cent compared to the same time last year, and an average property is now worth £144,851.Sarah Barnes, head of Residential Property at Napthens, warned that the increase could be down to a lack of homes available for sale, and reduced numbers being built.
She warned that measures announced recently under the government’s Mortgage Market Review to slow price increases, and the controversial Help To Buy scheme would not have a significant impact.Sarah said: “Our experience in Lancashire tells us that lack of supply is certainly pushing prices up. Fewer properties are coming onto the market, and there has been a lack of new homes being built, although this trend is changing as developers are now beginning to move forward with plans that may have been on hold.
“We don’t believe the Help To Buy scheme has caused a boom in house prices as some have theorised, as figures from the government show that only 4 per cent of the total number of mortgages granted in the UK were arranged through the scheme.“We have yet to see the real impact of the government’s plans to slow the price boom – such as ensuring those applying for mortgages could cope with a three per cent increase in interest rates, and limiting the number of risky mortgages banks and building societies can lend. “However, many in the industry think these measures won’t have a great deal of impact. Without an increase in the supply of available homes prices will continue to rise.”