Hunters are seeing a similar recovery to the one seen in the US last year, which is being helped along by more confidence in the economy overall, positive employment figures and a strong demand for housing, especially in the nation’s capital.
Since last year, Hunters have seen sales climb by 40%, with lending rising in May, prices at a 3-year high and the strongest growth since 2011.
It certainly presents a positive outlook, but is it here to stay? We think so; the sluggishness of the market over the past 5 years has increased the demand insomuch as, those who were putting off buying and sticking to rental, are now emerging as buyers.
Of course, this has also been helped by the government’s Help to Buy Scheme, which to date is already helping some 25,000 people per year get a foot on the housing ladder. This should further improve by 2014, when the Mortgage Guarantee Scheme is introduced, as it’s thought that this will help to fund around 300,000 mortgages each year.
Taking a closer look
The Help to Buy Scheme is designed for those with a 5% deposit looking to buy their first home or climb further up the ladder.
To qualify, you must:
Be purchasing a home worth less than £600,000
Be using the property as the main home
Be fully owned by the purchaser
Be a UK citizen, or someone with the right to remain indefinitely in the UK
At the moment, it’s only possible to access the Equity Loan scheme, with the Mortgage Guarantee scheme launching in January 2014. The former is available through UK house builders such as Persimmon homes and will be available for the next 3 years when purchasing a new build. The latter will allow buyers to purchase a new build, or previously owned property and rather than give a loan, the government guarantees a portion of the mortgage.
The equity loan is interest-free for the first five years and can be paid back when the house is sold or at any time before that. Despite launching in April, the Equity loan scheme is proving a success, with the Home Builder’s Federation (HBF) claiming that around 4000 home buyers have a reserved a property since the scheme launched.
It’s thought that this has boosted property prices, which they say are rising at the fastest rate since 2010.
"The Equity loan part of Help to Buy has got off to a flying start," said Stewart Baseley, executive chairman of the HBF.
"Four thousand reservations in just two months shows both the consumer demand for the scheme, and developers' commitment to it," he said.
So is the current positive movement in the market just a flash in the pan? The figures would suggest otherwise, and with more than one aspect contributing to growth, we think that the renewed confidence is here to stay for the foreseeable future.
Article by Kevin Hollinrake, Managing Director of Hunters Estate Agents. Follow Kevin on Twitter by clicking here.