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04 July 2013 by Gary



Many people are now talking up the general outlook for the UK property market. Today, the Halifax latest house price index showed that over the last quarter house prices were up 3.7% year-on-year, the biggest increase since 2010.

Recent figures have also reported continual sales growth for consecutive months; the number of ‘sold boards’ placed increased by 8% over the five months to the end of May 2013 (Source: Agency Express Property Activity Index, 2013).

On another positive note, this week Persimmon, a Top 5 UK house builder announced sales have increased by 30% since the introduction of George Osborne’s ‘Help to Buy’ scheme. Their sales are up 7% in the first half of the current fiscal year.

These optimistic messages are supported by other figures looking at annual housing starts. New build starts were 4% higher in the last quarter to March 2013, private enterprise showing a 7% increase compared to the equivalent three months last year (Source: GOV.UK, 2013).

There are those who are less bullish. A city commentator has captioned the ‘Help to Buy’ scheme one of the “most stupid economic ideas” of the past 30 years. Critics warn against inflating a new housing bubble with a government guaranteed scheme, advising that prices still need to fall further and reach their own level where demand catches up to supply.

In a climate chilled by the 2008 crash, there is no consensus. Uncertainty prevails and there is no definitive solution, rather diverse opinions and ideas. Local authorities have reduced their housing targets. Some people have questioned whether home ownership is sustainable and suggest we should accept a re-shaping of the housing market with more focus on renting, others have suggested social housing should be filling the gap.

One result of the crash was a drastic reduction in the number of smaller house builders and developers. I was at a recent Chamber property event and listened to a Yorkshire based developer make his plea. He is experiencing an increase in the number of presenting development opportunities, although there are still difficulties in getting funding, accessing commercial finance as lenders remain cautious. Perhaps one of the main areas needing attention is how can finance be made more readily available for private enterprise in this sector?

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