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Boom highlights UK housing fairy story – e.surv

by: Richard Sexton
  • 28/08/2013
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Boom highlights UK housing fairy story – e.surv
As the hype around resurgent property and lending markets fizzes away, spare a thought for those for whom this all still seems like a bit of a fairy story.

Nationally, house prices have never been higher and 2013 will be remembered as the time when the property market recovered from the 2008 financial crisis. Mortgage lending is going from strength to strength buoyed by actual and proposed government intervention and the number of first-time buyer mortgages are at the highest since 2007.

Summer always bring a flurry of further activity and I’ve just head tell of an estate agency with just a handful of property to sell as his clients’ houses are going out the door faster than hot cakes.

All very recognisable if you live in or close to London or are one of the many foreign nationals buying up bits of the capital. In July, 30% of all the  mortgage applications we saw were in London – where only 12% of the population live.

Without any conscious policy decisions by lenders, lending distribution patterns are shifting south as that’s where all the equity is. But the divide between London and the rest of the UK housing market is getting bigger and bigger and let’s not forget that despite this overall improvement in the market, the level of first-time buyer activity is still around half of what might be considered normal levels.

According to the LSL house price indices, prices have fallen by 1.6% in Scotland over the last year – though signs of a more positive trend are detectable.

Likewise Wales has yet to recover and Northern Ireland continues to have a miserable time with falling prices and low transaction numbers meaning that those who make a living from housing and lending in the region will be pretty glum right now. Nine-in-ten of the UK’s repossession hot spots are north of Birmingham, with only Luton featuring in the southern half of the UK.

Consequently, the most affordable places to live in the UK are also the areas where it’s still much harder to find a decent job. No job means no deposit and no deposit means no mortgage and no mortgage availability means that areas fall even further behind – a vicious circle.

Having done a cracking job of kick starting the market, the UK government could do well spending some time addressing this growing imbalance – it’s such a fundamental part of our economy we can’t afford to ignore this much longer without long term consequences.

Richard Sexton is director of business development at e.surv

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