Stoking up the housing market
The Bank of England and the Government are both keen to see the housing market re-ignited and in their own way both are saying and acting to make this happen. Their collective efforts are making the headlines with the Council for Mortgage Lenders reporting lending having picked up in 2012 with the number of first time buyers rising by 12% to its highest number since 2007. The office for National Statistics reported UK house prices rising by 3.3% last year too.
Mervyn King and the Bank of England have kept interest rates at their record low level of 0.5% since March 2009 nearly 4 years ago. The Governor is now signalling in his latest speech and Quarterly Inflation Report that he expects inflation to remain above the Bank’s 2% target rate for 2 years, he may as well have said “I don’t care what inflation is”.
With the Bank showing no signs of increasing costs of finance there is little to hold back a property market where credit and supply issues are being slowly healed by Government.
Our work for the National Housebuilders reflects this growing confidence in the industry. The agency work of selling residential sites and planning work bringing forward consents on sites is all busy and we have seen our workloads increasing and growing market demand.
The RICS have just reported property sales rose for the fourth month in a row and their spokesman even said the “very worst” may now be over which echoes Mervyn King’s assertion that “a recovery is in sight”. Someone is bound to say shortly they’ve seen a “green shoot”!!
The Government’s Funding for Lending Scheme which my colleague, Charles D’Auncey recently highlighted in his Blog piece is also offering cheap funds for Banks and Building Societies to push through to customers. This cheaper money seems to have had a real benefit to the first time buyer market.
When you can fix home loans for 5 years at interest rates as low as 2.7% then the incentives for home ownership are considerable especially when, nationally, prices are rising at 3.3% annually.
If you want advice on residential land or planning advice on residential and mixed use projects contact one of the agency or planning teams at Harris Lamb.