The U.K. housing market recovery is gathering speed according to the latest data and is set to be further supported by government funding schemes, but some are warning the measures could spur a housing bubble and the government should instead be tackling the lack of housing supply.
On Tuesday, the British Bankers Association (BBA) reported that mortgage approvals hit a 17-month high in June, totaling 37,278. Approvals were up 32.4 percent compared to June 2012. The BBA figures add to several data and surveys recently indicating a turnaround for the U.K. housing market, helped by improving consumer confidence and elevated employment.
Howard Archer, chief U.K. and European economist at IHS Global Insight, said housing prices would rise as a result of the increased activity, though a challenging and somewhat uncertain economic environment remained.