Wed, 8th Aug 2018
A combination of rising house prices and fewer properties on the market could mean bad news for first-time buyers.
The Halifax House Price Index shows that the average house price has increased to £230,280, which is the highest ever on record in the UK. At the same time, the number of properties on the market has been falling steadily. For 26 months in a row the number of properties for sale fell, and while last month saw it increase very slightly, the overwhelming trend is downwards.
This could spell bad news for first-time buyers, and while in the short term it is good news for housebuilders, it could be a warning sign of a bubble.
Mortgage approvals are on the up at the moment, and there are options for those who are looking to get on the housing ladder. The government’s Help to Buy Loan, for example, is a useful option for people who are looking to buy their first home if they have only a 5 percent deposit.
Interestingly, London is one area where house prices are falling. This could be a symptom of growing Brexit anxiety, as certain financial companies and other major employers are starting to move their businesses elsewhere, meaning that there is less interest in living in some of the higher-priced areas. Whether that trend will last remains to be seen.
For now, however, it appears that popular housebuilders such as Berkeley Group, Crest Nicholson and McCarthy and Stone are companies to watch, especially if they announce developments outside of London. Crest Nicholson issued a profit warning back in April, and McCarthy and Stone has been hit by the slowdown in London, but the recent surge in house prices could be good news for all three companies.