New report of the UK property market Nationwide

Today we present to Your attention the review of one index of property prices in the UK – the Nationwide Index

According to the report, property prices in the UK in may rose by 0.7% compared with may 2013 , they were higher by 11.1%.

Prices are rising for 13 straight month and the average price of a standard home has now reached £185512.

In recent years there has been tentative signs that the pace of price growth begin to decrease slightly. The first call about this appeared in April 2014, when the number of approved mortgages was 17% less than in January 2014. It is too early to speak about the cooling market, as the slowdown in sales may be due to the introduction of new rules of mortgage lending, the introduction of which can have an inhibiting effect for several months.

Now on the market for mortgage lending historically low interest rates and as the situation on the employment market will improve, underlying demand for property will remain strong.

Gradually, as the market recovery will decrease the role of first-time buyers afford housing, as they account for the lion’s share of those who used the scheme “Help to buy” . More and more buyers and sellers will enter the market, encouraged by the optimism shown by the market after years of stagnation. Positive processes in the economy and improving conditions in the labor market play a role in stimulating customer demand.

This is evident in the example of London, where there is the largest in the UK price increase. The main reason of growth is not the lower price segment, which is fueled by the scheme “Help to buy” , as the middle and upper where the real interest of buyers and investors. A similar situation in the South-East coast of England, where growth in property prices are in second place after London.

Scheme “Help to buy” has a large market share in the North of England, where prices rise less than the market average. Approximately 45% of the loans under the scheme “Help to buy” was issued for property worth up to £125,000 pounds, which clearly shows that the scheme was a good incentive to solve the housing problem families with low income and has no strong influence on the purchase of expensive houses and apartments.

® Maxim Savitsky 02.06.2014

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