Estate agents: Help to Buy is boosting prices
THE GOVERNMENT’S flagship scheme to stimulate the housing market is pushing up prices, estate agents warned yesterday, despite new Bank of England governor Mark Carney playing down the risk of a housing bubble.
Homes in the Greater London area will shoot up by 6.9 per cent in value this year, according to Cluttons, while annualised growth will be 3.2 per cent over the next five years.
In prime areas the cost of buying a house will jump at an even faster rate with prices soaring by 8.4 per cent this year, the firm calculated, adding that the government’s Help to Buy scheme is in danger of driving prices further beyond the reach of hopeful buyers.
“Credit ratings agency Fitch has also warned that Help to Buy could artificially push up house prices without increasing the number of homes built, which corroborates Cluttons’ expectations of affordability re-emerging as the central issue for buyers,” it said.
And separate research from the Sequence chain of estate agents – including Barnard Marcus and William H Brown – said that UK house prices reached a new high of £200,080 last month, up six per cent annually – the highest price for over three years.
Yet Carney, speaking at yesterday’s Inflation Report conference, seemed unworried by the housing market.
“We have to put recent developments in context – we still see, for example, mortgage applications well below historic averages,” he said. “[And] the proportion of loans that are high loan to value is about 40 per cent. Pre-crisis they got up to about 70 per cent.”