As the housing market continues to display signs of a significant recovery, concerns about the creation of a property bubble have become an increasingly prevalent theme throughout the industry.
However, a recent survey from the Building Societies Association (BSA) suggests that both consumers and industry professionals are far from convinced that the rising cost of property will lead to over inflated prices in the property market.
According to the survey, only two per cent of respondents were concerned that the recent upturn in the market was a sign their local market was ‘overheating’ and only seven per cent felt that the property market in London was in danger of the same problem. One in five respondents to the survey were confident that the market is recovering.
An increased number of respondents than in the previous survey, think that now is the right time to buy a property, though 39 per cent feel a lack of deposit is still delaying consumers’ ability to gain access to a mortgage.
The Royal Institute of Chartered Surveyors (RICS) recently proposed that the Bank of England introduce a five per cent cap in house price inflation which they described as “speed bumps to help moderate the rate of national house price inflation”. Though the news could be viewed as an attempt to prevent an impending bubble, chief economist at the RICS, Simon Rubinsohn, disagrees.
Rubinsohn said: “We have made it clear repeatedly that nationally, the housing market could in no way be described as being a bubble. The regional picture is extremely varies and we recognise how many parts of the UK are only just beginning to see the first signs of recovery.”
Commenting on findings from the Property Tracker survey, director general at the BSA, Adrian Coles, said: “At the moment, sentiment across the UK, particularly in markets outside London, is increasingly positive but still cautious. The hope is that the mix of consumer-sentiment, additional house-building, mortgage availability and government intervention will lead to an improved but stable market.”
Julie is a law graduate who qualified with Price Waterhouse in 1994. Julie joined Smith & Williamson in 1997 and became a partner in 2001. With Mike Stevenson, Julie set up Middleton Partners offices in Salisbury and Southampton, both of which are now part of Begbies Traynor.
Julie is a member of the Insolvency Practitioners Association and is a Fellow of The Association of Business Recovery Professionals. Julie deals with all aspects of Corporate Recovery and turnaround work and takes all form of personal insolvency appointments.