Residential property prices in the UK appreciated by 0.4% in May, as more buyers piled into the market, fuelled by improving conditions and government schemes such as Help to Buy, according to Halifax.
“House prices continue to pick up gradually,” said Martin Ellis, Halifax housing economist.
For the three months to May, UK home prices rose by 2.6% compared to the same period last year – the biggest rise since September 2010.
Ellis added: “Market activity has also improved slightly in recent months although home sales remain low by historical standards. Despite these recent signs of improvement in the housing market, the subdued economic background and the accompanying weak income growth continue to be a significant constraint on housing demand and activity.”
Moving forward, many property commentators expect to see property prices rise further, supported by Help to Buy.
The scheme currently allows buyers to acquire a new build property up to the value of £600,000 with a minimum 5% deposit. The initiative will be opened up to resale homes next January, potentially helping to push property prices higher in the process.
But there are fears among some that this could lead to a housing bubble.
A report issued by the International Monetary Fund (IMF) two weeks ago stated: “This measure (Help to Buy) may temporarily help boost confidence in the housing market, but there is a risk that, in the absence of an adequate [housing] supply response, the result would ultimately be mostly house price increases that would work against the aim of boosting access to housing.”Source: propertyinvestortoday.co.uk