HOUSE PRICES CONTINUE TO BLOAT IN JULY, RISING BY 0.8%

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The Property Reporter had a lot more to report about property prices on Friday 2nd August.
It certainly seems as if this artificially induced rise in UK house prices is not yet being checked and increased by another 0.8% in July and were 3.9% higher than July 2012 bringing the average UK home value at present to £170,825, which is more of a nightmare than a blessing, one estate agent at Nelsons commented.
A senior economist Robert Gardner confirmed that UK house prices rose by a robust 0.8% in July, providing further evidence of an upturn in the housing market which does bring the annual rate of house price growth to 3.9% in July 2013 although it is somewhat “inflated”, he said by the low base for comparison, because last year the prices declined by 2.6% in July.

AMAZING HOW JUGGLING FIGURES CAN PACIFY ANXIOUS MINDS

House prices are currently around 12% higher than the lows seen in the midst of the financial crisis, so what, they are still higher than the average actual worth, despite the fact they are still around 10% below the all time highs recorded in late 2007, which was utter lunacy. Throw statistics at the people and campaigners in completely opposite camps can twist the exact same facts to prove their own opposing arguments, and calm the minds of the same people to accept different objectives.
“Signs of a modest improvement in wider economic conditions and further modest gains in employment are likely to be lifting buyer sentiment. The ease of approval for, availability and a reduction in the cost of credit”, mostly the result of government creation of the 'Funding for Lending' and 'Help to Buy' schemes, are the main culprits for boosting the demand for homes and the resultant inflated prices which estate agents all over London are forced to charge.

WHEN DEMAND OUTSTRIPS SUPPLY, IT LEADS TO RECKLESS ONE-UPMANSHIP

In part the continued price increases are bolstered by the supply side of the market which remains constrained. Building activity is still subdued and during the 1st Quarter housing completions in England were down 8% when compared to the same period of 2012 and around 40% below the average number of quarterly completions in 2007, when at least the exorbitantly high prices positively effected production. How on earth will the estate agents in Shoreditch, or anywhere for that matter, survive.
What is even more disconcerting is that growth in charges for houses to rent has been consistently outstripping wage growth and reinforces the fact that housing remains disturbingly in short supply and with that status quo, property prices will never be checked, which in turn due to human nature creates the psychological notion that a person/family has to own a home to keep up with the Joneses and consequently the Jones family has to own an even better one.

THERE IS AN OPPOSING MORE POSITIVE POINT OF VIEW TO THE SUPPLY DILEMMA

The chief in charge of one of the bigger estate agents in London added that the recovery of GDP
has spilled over into the housing market which in part resulted in property prices being up again in July. In their opinion the 'Help-to-Buy scheme' has boosted market confidence, while more sane people will argue it sent it into a frenzy. Those in favour of the schemes pronounce the “so called property bubble” on the horizon is horror fantacy, that this renewed lending is responsible lending in a climate where home owners are seeing their equity increasing, yes, till the day when the so called equity value normalises to below the outstanding debts. That thought is fully backed by the fact, for each property coming onto the market, an average of 19 buyers are chasing it which makes a mockery of the balance of supply and demand. And you thought it was fun being an estate agent in Bethnal Green, Ha!

THE MORTGAGE ADVICE BUREAU's HEAD OF 'LENDING' POURS FUEL ON THE FIRE

He magnanimously admitted that the Government interference has certainly affected the mortgage market: Funding for Lending celebrated its one year anniversary this month, while the Help to Buy scheme is continuing to attract interest from lenders and borrowers alike, of course.
Then he applied the coup de grace by stating, house prices are more than likely to rise even more in the second half of this year, then the cheekiness: “- - now is the time for any home buyer who can afford a deposit to spring into action.”