house prices

Does the UK have a housing bubble?

Does the UK have a housing bubble?

Readers Question: Do you think the help to buy scheme is fuelling a housing bubble? Only about 3% of houses are bought through this method but do you think that it is likely that a bubble will develop? In a way, I think you answer the question yourself in stating that only 3% of houses are bought through this method With such a small percentage of homes bought through this scheme, it is not going to be a major cause of a housing bubble; however, in a relatively significant way, it…

House prices and interest rates

House prices and interest rates

There is concern that UK house prices are rising at an unsustainable rate. In the past 40 years, UK house prices have consistently grown faster than average earnings. (Why are UK house prices so expensive) Even as the economy just begins to emerge from recession, the housing market is already showing signs of overheating. In some areas, house prices are rising 10%¬† a year – much higher than CPI inflation of 1.6%. Expensive house prices threaten the economy in various ways: Make many areas unaffordable…

UK House Price to income ratio and affordability

UK House Price to income ratio and affordability

An examination of UK house price affordability. In 2013, UK house prices rose 8%, and most forecasters expect UK house prices to continue to rise above inflation in the short term. However, there is a big concern that house prices are already unaffordable for most first time buyers. In many parts of the country, potential buyers are being kept out of the market due to house prices being much¬† higher than average incomes. Because of the lack of affordable housing, many have criticised the government’s Right to Buy scheme -…

Would a cap on house prices work?

Would a cap on house prices work?

Readers Question: Would a cap on house prices work? Despite the recession and credit crunch, UK house prices continue to rise. (See: Why are UK house prices so high?) This has caused record levels of house price to income multiples. For homebuyers in London, house prices are approaching a record seven times average earnings. Understandably many feel house prices are already too expensive, and there is a strong case for trying to limit future house price increases. For example, the Royal Institution of Chartered…

Why are UK house prices so high?

Why are UK house prices so high?

In the past five years, we have had a devastating global credit crunch, the longest and deepest recession since the 1930s (if not worse). Across Europe, we have seen mass unemployment and in countries like Spain, Ireland and Portugal, the housing market has seen up to 50% falls in house prices. Yet, despite this financial and economic upheaval, UK house prices have bucked the trend and avoided a major collapse that many were predicting as the credit crunch hit. It is true that in the first years of the credit…

Irish property market – boom and bust

Irish property market – boom and bust

During the 1990s and first half of 2000, Ireland had one of the longest property booms on record. Between 1996 and 2006, the average price of second homes rose in Ireland rose by over 300%. The average price of new houses rose by 250%, according to the Department of Environment, Heritage and Local Government (DoEHLG). However, since the peak in early 2007, Irish house prices have fallen 50% – and there are few signs of promise for the Irish housing market. The rapid rise in Irish prices was initially a…