The growth in property prices in the UK ahead of the recovery

The asking price for residential property in the UK continues to grow, having increased last year by 2% and now it is 12% more than a year ago. Asking prices in England and Wales the average is now higher by 5.5% than a year ago. Only three UK regions – North East, North West and Scotland recorded growth in asking prices over the past month.

The growth of asking prices in England and Wales is primarily due to the fall of the suggestions in these regions of 18% from last year.

Monthly base price in England and Wales increased by 1% – the largest monthly price increase since may 2011. London and the South-Eastern part of England still continue to show strong growth in property prices, remaining the engine of recovery of the UK property market.

And only in the market of real estate of Scotland still observe the process of deflation of property prices in Scotland fell by 1.4%.

The imbalance between demand and supply continues to dominate the property market in England and Wales. But if in England and Wales the decline in the supply of new real estate is 18%, in London the amount of supply of new housing decreased by 31% compared to last year. The imbalance between supply and demand in the property market resulted in the fact that the average time on the market of the property decreased by 8% over the past 12 months.

However, you must keep in mind the bipolar character of the UK market, where annual price growth in London has reached 11, 7% South-East 7% South-West – 4, 6% over the past 12 months. Annual prices rose 4% in the East Midlans, 3, 5% in West Midlans . At the same time, the remaining 4 of the 9 region and Scotland showed a fall in prices.

Generally, the pattern of growth in property prices keeps pace with inflation in the regions.

The price increase is fraught with the danger of a bubble in the property market in the UK. Especially if the offer will still be much to keep up with demand. Increasingly acute shortage of new housing becomes the breeding ground for the growth of prices.

For example, the average price of a property in London exceeded £400000, which is 15.3% higher than five years ago. The dynamics of growth in property prices in London shows no signs of slowing down. And even real estate prices in the South-East, which are traditionally high, do not go in no comparison with London, where within a radius of 10 miles from London in the price range up to £600,000 pounds in which is government assistance when buying via the program “Help to buy” , gets only 60% of the residential real estate.

The growth in property prices in the UK certainly indicates a recovery of the real estate market. But without recovery of the entire economy of the island, this price race is reminiscent of the jump one horse. In conditions of a weakened economy crisis, when people’s incomes are not rising and sometimes even falling, inflation of housing prices will make the availability of own homes and apartments even more distant dream for many UK residents.

® Maxim Savitsky 17.10.2013 g.