Estate agents predict house price bounce but outside London prices still falling
National figures mask vast regional differences
January 16, 2013
The Royal Institute of Chartered Surveyors (RICS) has produced its most optimistic report since mid 2010, predicting a “spring bounce” in the housing market. The survey claims that the market “could be over the very worst” and that house prices may start to recover to the 2007 peak. This is due to the government’s Funding for Lending scheme which allows banks to borrow up to £60 billion at a low interest rate on the condition that the money is lent to individuals and businesses.
However, the optimism of RICS and other lenders should be taken with a pinch of salt. Only London and the South East have experienced increases in house prices in the last three months. All other regions have seen a fall. Last month there was a slight increase in prices in the West Midlands – the first time for over two and a half years. Compared to most regions London is on another planet. There has been almost constant growth in the capital despite the housing crash. This is fueled mainly by foreign investors who, in a self-fulfilling prophecy, see London as a sound investment. In 2011 60% of new build properties were bought by overseas buyers. Just last week 600 flats proposed for the Battersea Power Station site were sold in just four days for a price of £600 million.
As always, if you want to know about prices in your area or the area in which you wish to buy don’t look any wider than what’s happening in that postcode.