The UK housing market has been in a fantastic state of health throughout the last year when compared to the years that have preceded it. Riding a wave of low interest rates, higher demand and improved economic conditions for buyers, the market has improved substantially, with prices climbing by more than five per cent in the year to the end of January. However, there has been one arm of the market that has remained subdued, but it could be recovering at last.
The stock levels in the market have been so low that the supply and demand balance has become a concern, with many predicting that it could lead the UK towards another housing bubble. But the past 12 months have seen a substantial rise in new homes being built, with these likely to filter into the market across the next few months, according to official government figures.
In the past year, the government states, the number of housing starts has climbed by 23 per cent, boosted by factors such as the Help to Buy scheme and the return to health of the construction sector as the economy expanded in the second half of the year. The number of properties being constructed - 122,590 throughout the year - was the highest seen in any year since 2007, giving 2013 a post-recession record and suggesting that house building could be on its way towards a return to health.
And communities secretary Eric Pickles said that the last year has been good for builders and land investors. "Last year we built the most homes since 2007, and even the appalling weather conditions this winter have not stopped our hardy builders from getting the job done. That means an increase in small firms benefiting from the surge in construction orders, and more business confidence in the economy," he explained. Mr Pickles went on to add that the government action on keeping interest rates low was one of the biggest factors in getting people building again.
Editors Note: Rising house prices led to the government introducing Help to Buy to assist first time buyers (amongst others) that could not afford to buy. The opposition insisted that building more would bring prices down. Who new that neither idea would work? We did - see 40 years of government data that clearly illustrates that it's not the housing market that's broken - it's the lending system. Read "Will More House Building Really Ease House Prices?"
- Wednesday 26 February 2014