Fears that Britain’s housing market is headed for bubble territory were stoked on Monday by fresh evidence that demand is far outstripping supply.
As the market heats up, buyers desperate to secure a property are paying the highest proportion of asking prices seen for a decade, according to a report from property researchers Hometrack. In London, buyers are paying more than 99% of asking prices against a backdrop of soaring demand from foreign investors and local house hunters.
The figures come alongside a warning that the south of England faces a shortfall of at least 160,000 homes by 2018. An analysis of building projects by upmarket estate agent Savills finds that local planning authorities are “simply not planning enough new homes to meet the growing housing need.”
The reports follow assurances from the Bank of England that it is poised to take steps to slow down Britain’s housing market if the pickup in prices and mortgage demand signals a new property bubble.
Hometrack said house prices rose 0.6% in March, a slight slowdown from 0.7% growth in February, on lower growth in London and the south-east. But it said the fundamentals suggested more house price growth ahead as demand grew 6.6% in March – which it measures by new buyers registering with agents – and supply rose 1.9%, based on new listings.
Richard Donnell, director of research at Hometrack, stressed that not all areas were seeing surging demand with the north, north-west, Yorkshire and Humberside and east Midlands seeing price growth of less than 2%. He also rebuffed suggestions from some critics that the government’s Help to Buy scheme was pushing up prices.
via The Guardian
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