No Bubble Claim Despite Latest Housing Market Surge
Wed 15 Jan 2014
Industry experts continue to claim there is no sign of a property bubble despite bullish new data showing that house prices and homeowner confidence are soaring.
Government figures published yesterday showed house prices rose 5.4% in the 12 months to November and 11.6% in London.
Prices in London are now 18% higher than their previous peak in January 2008.
Homeowners are also in a confident mood, predicting house prices will rise 7.2% between now and the summer, according to the latest Zoopla Housing Market Sentiment Survey.
Londoners predict 9.6% growth. These are Zoopla's most upbeat forecasts in four years.
Peter Rollings, chief executive of Marsh & Parsons, said UK houses prices show no signs of winding down.
"House price growth has washed across every corner of the UK, and the latest government figures show that in a third of regions, house prices have now surpassed January 2008 levels."
London is "sailing ahead", with prices rising at double the national average. "We predict London house prices will raise by a further 5% to 7% over the next 12 months.
"We have almost 23 buyers registered for every available property, which will inevitably keep property prices high, but as more property comes onto the market, we expect this to stabilise.
Paul Smith, chief executive of estate agency Haart, said rapid growth in the capital will gradually slow. "We do not predict a bubble in London because growing world demand for property here is as strong as ever and underpins the prime areas."
Excluding London and the South East, UK house prices rose a more modest 3.1% in the 12 months to November 2013, government figures showed.
David Newnes, director of LSL Property Services, said the recovery still has some way to go and we are nowhere near an unsustainable house price bubble.
Brian Murphy, head of lending at Mortgage Advice Bureau, said house prices "are rising at a steady trot rather than a gallop".
It is likely that mortgage activity will rise even further in 2014. However, the Bank of Englands authority to intervene to keep house price growth at a sensible level should reassure consumers concerned about inflating values and keep the market on track.
Stephen Smith, director, mortgage club and housing at Legal & General, warned that in a two-speed housing market the government faces a difficult balancing act in trying to avoid sparking a bubble in the south while preventing other parts of the country falling too far behind.