U.K. house prices rose to a record last month as easier access to credit drove first-time buyers back to the market. As Bloomberg reports, the second phase of the government’s Help to Buy program was introduced this week, providing government-guaranteed mortgages to buyers with smaller deposits. The acceleration has fueled further concerns that the initiative may stoke a bubble. But have no fear...
- *BOE'S CUNLIFFE SAYS U.K. HOUSING NEEDS TO BE WATCHED CAREFULLY
- *CUNLIFFE SAYS DOESN'T AGREE U.K. IS ENTERING A HOUSING BUBBLE
What could go wrong? - "Demand has increased significantly in a short space of time, and raced ahead of the supply of homes." Now where have we heard that before?
Via Bloomberg, [7]
U.K. house prices rose to a record last month as easier access to credit drove first-time buyers back to the market, Acadametrics said.
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The second phase of the government’s Help to Buy program was introduced this week, providing government-guaranteed mortgages to buyers with smaller deposits. The acceleration has fueled further concerns that the initiative may stoke a bubble. Mortgage approvals rose to the highest in more than five years in August, the Bank of England said last week.
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House sales rose 12 percent this year compared to 2012, with the increase in transactions predominantly in the first-time buyer sector of the market, Acadametrics said.
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LSL said concerns about a housing bubble developing are overblown. While prices are rising, it is only a “fledgling recovery,” Newnes said. “It is not a boom or a bubble. It is a market correction, albeit a fairly quick one.”
The whole country will benefit from Help to Buy because it supports buyers in the southeast, where prices are higher, and in the north, where wage growth is slower, Newnes said.
See - it's for your own good...
And the Bank of England's Cunliffe would just like to let everyone know...
“It’s too early to say whether we’re entering into a bubble,” Jon Cunliffe, deputy-governor designate at the Bank of England, told U.K. lawmakers today in London.
"I agree that prices have risen fast this year. It’s coming from a relatively low level, housing activity is still not back to levels before the crisis”
“The picture emerging is that prices are starting to rise, but we’re still coming back from a relatively low base, and of course its a patchy picture because there’s quite a dispersion across the country”
“It doesn’t look as if there is a bubble”
So just like Bullard has noted before [8], he sees no bubble because everyone knows when a bubble is happening ("they're obvious")... so please go re-leverage and BTFATH in UK homes...