UK property market is “on fire” according to Bank of England.
The stamp duty holiday and the demand for larger homes would be the determining factors in driving prices.
Britain’s housing market is “on fire” thanks to the extension of government tax breaks for home buyers and increased demand from wealthier households with more savings following the coronavirus lockdowns, said the Tuesday the chief economist of the Bank of England.
Andy Haldane cautioned that the housing market is likely to continue to function as long as all of these factors, combined with ultra-low interest rates from the central bank, remain in place. He said the recent rise in house prices, which exceeded 10% during the 12 months to March 2021, according to official data, was very likely to worsen inequality.
“As it is, the UK housing market is on fire,” Haldane told a virtual conference on inequality organized by the University of Glasgow. “There is a significant imbalance between incipient demand and the available supply of homes, and because the laws of economic gravity have not been suspended, the result is quite strong increases in house prices.”
Haldane said the dramatic rise in prices is very likely to widen the wealth gap between the wealthier and younger generations.
Unless lawmakers address the housing supply, Haldane said, “We will inevitably see the kind of relentless rise in home prices relative to income that we’ve seen in the last 30 or 40 years.”
“For most people, the global financial crisis happened like an earthquake that exposed those structural flaws in our societies, of which inequality is one of the greatest.”
“The government has put housing out of the reach of the middle class.”
Chancellor Rishi Sunak has come under fire for pushing the cost of housing out of the reach of middle-income groups after he lowered the stamp tax on property purchases last year. The move reversed a drop in property sales at the start of the pandemic. It extended the temporary tax cut in the March budget until the end of June 2021.
Households, many of them with people working from home, have accumulated around £ 160bn in savings since the start of the pandemic. Sunak’s tax incentive came as many of them sought larger properties to include gardens and home offices.
Halifax said this week that home prices are likely to continue rising for some time despite hitting a new record in May.
The mortgage lender, part of Lloyds bank, said house prices rose 1.3% in May and 9.5% over the past year, bringing the median sales price to a record £ 261,743.
HICH LTD has revolutionized the property survey market since day one! Are you looking for a roof, structural, or bespoke survey? Request it here!
Follow us on our social networks to keep up to date with the most relevant property market news, tips for being a responsible homeowner, and much more!
Twitter: @HichLTD
Facebook: HICH-LTD
We are recruiting Freelance Surveyors and Building Inspectors to carry out Roof & Property Condition Inspections. You will be required to inspect and assess the full external and internal condition of various property types, new and old, including Domestic and Commercial. The position is Home-based, covering all postcode areas throughout the U.K.
Fees range from between £150-£195 per inspection, previous experience in building surveying and or buildings insurance claim surveying with a proven track record or property inspection experience essential.
If you or someone you know meets these requirements and wants to be part of the team of the best surveying company in the UK, please contact us at hichinfo@aol.co.uk.
