Is it just five years since Lehman Brother went bust? Well judging by current residential property market activity levels it would appear the UK’s ‘era of austerity’ is ending and there are increasing signs of confidence, with property values on the increase led by first time buyer demand. The Help to Buy scheme has undoubtedly impacted on the new housing construction sector and I had some firm confirmation of this recently from a north west region trade contact, who told me that their latest scheme of approximately 45 entry level houses has been completely sold, within eight weeks. The striking fact was that they had expected to do this over a three year period!
There is now much debate in the wider media as to whether the second element of Help to Buy, for all properties - and which will offer a mortgage indemnity guarantee for properties up to £600,000 will be allowed to occur - or be toned down to prevent a 'boom and bust' scenario occurring in just a few years time.
My view is that the 'cat is out of the bag' already in terms of rising confidence levels which is outlined in a number of articles in this edition and so it should be left to lenders to control matters by being selective as to who and what they lend on and on what level of LTV etc. Without a doubt the market in London and the south east is 'motoring' and it really does not need any more stimulus measures.