Skip to main content

You are here:

House prices failed to leap this spring

Written on . Posted in The Housing Crisis.

It is reported today that the traditional spring bounce in the housing market failed to materialise, with prices falling and potential buyers remaining wary. On average, surveyors completed 15 sales each during May. Are we missing something here?

 

  • The number of UK homes repossessed by mortgage lenders rocketed to 9,100 in the first quarter – up 15%.
  • The number of arrears exceeding 10% of the mortgage balance reached 27,700.
  • The national average price for a house is currently £205,985 and generally requires a 20% deposit. · Perhaps 5 million people are on a housing list somewhere in the country.
  • There is such a shortage of new homes that we need to build 300,000 units every year for the next 10 years just to keep pace with current need and population growth.

Yet continually we read that we need a boost in the housing market to increase prices. Why is a rise in the price of a house a good thing? Won’t this make it even more difficult for first time buyers to establish a home and involve higher mortgage repayments for anyone moving house?

In most other markets an increase in demand usually encourages additional suppliers to compete and prices fall. So the question is, with such a huge demand for housing, why is there such a shortage and why do we continually bemoan the fact that house prices are low and falling?