UK property market on the rise

House prices are on the up, thanks to the UK government providing just enough stimulation for first-time buyers to enter the market.

Based on a nationwide survey of estate agents and information from the Royal Institution of Chartered Surveyors (RICS), house prices are rising across the country, especially in London and its commuter belt.

Government interventions like Funding for Lending and Help to Buy have catapulted homebuyers into the UK property market again. Help to Buy is particularly attractive for first-time buyers; from October, Britons can now buy a home priced up to £600,000 with only a 5% deposit.

According to RICS, property prices were up for the fifth month in a row in September, the biggest growth the market has seen in four years. Some banks have even extended their opening hours to sate demand.

Help to Buy has effectively removed the hurdle for first-time home buyers. In a long-struggling market, cheap mortgages like this are proving too tempting to resist.

With about 14,000 Help to Buy-assisted sales since April 2013, it’s no wonder that developers and home builders are happy to continue backing the scheme.

The Bank of England is vetting the scheme every year as per the government’s request, instead of at the end of its three-year lifespan. Meanwhile, the Home Builders Federation (HBF) is working hard to allay market fears.

“We feel that talk of a housing bubble is premature,” says HBF chairman Stewart Baseley. “It’s not in housebuilders’ interests to see excessive house price inflation. Besides, if you exclude London, house price inflation in the rest of the country is running at under one per cent.”

For the time being, the protests of Help to Buy’s most fervent critics are being drowned out by the rumble of removal vans and the music of house-warming parties.

Some say that a sure-fire sign of a healthy market is the return of concerns that a housing boom is on its way. But more than that, owning an investment property in London is an emotional goal for many expats living and working in the UK. It’s no wonder, then, that first-time buyers see this opportunity as the best they’ve had in a long, long time.

Sable Mortgages is one of the leading foreign national and contractor mortgage specialists in London, helping non-residents and self-employed contractors obtain a competitive mortgage since 2006. 1st Contact is a proud member of Sable Group.