By Andrew Young-
House prices across the UK are rising at a fast rate, applying pressure on Mortgage home owners, but benefiting outright homeowners.
Halifax has reported that in the year to October, prices rose by 4.5%, up from 4% in September, and this was the fastest rise since February. It brings the average price of a UK house to a new record high of £225,826.
Halifax added that cheap mortgages and high employment rates were likely to continue to support house prices in the months ahead. However, a rise in house prices will inevitably raise Mortgage payments, though not enough to make them high relative to the level of inflation.
The market is unlikely to be dampened despite the rise in last weeks base rates, according to Halifax
“We do not anticipate the base rate rise will be a barrier to buying a house,” Russell Galley, the managing director of Halifax Community Bank told reporters.
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DOUBT
Some economists have cast doubt on the quality of Halifax’s assessment.
Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, said the Halifax measure was inconsistent with other indicators, describing their data as ”volatile”.
He claimed that Nationwide had reported growth of just 0.8% in October, while Rightmove’s online asking price index rose by just 0.2%.
“The Halifax data are particularly volatile, so we’re inclined to place more weight on the Nationwide and Rightmove measures,” he said.
Public confidence in rising house prices has also fallen to its lowest level since December 2012, the Halifax Housing Market Confidence Tracker also showed, Some 50% of those questioned in the survey believe house prices will rise over the next 12 months, the lowest level since 2013. By contrast, 20% believe that house prices will fall – the highest proportion for five years. The state at which house prices are actually rising in the Uk may depend on which part of the country one is. Areas where an influx of affluent professionals occurs within a period of time will naturally raise the value of houses in the area to reflect the changing economic growth there.
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In a society where people begin to work harder and develop their skills and training in various fields, a more productive labour force emerges and stimulates more competition to attain products and assets worth more because of the rush for the product. The response and adaptability of British households to house price rises or the effects of Brexit will define how affordable houses will be for each. If, as we must be optimistic, a profitable trade deal is eventually achieved between the UK and The EU, hardworking British people will ada
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