Stats and Figures on House Sales in the UK
The housing market has undergone a surge in the last few years. Back in 2007 when the financial crisis first became clear, it almost came to a standstill. Banks were irresponsible with their lending policies back then. They suffered heavy losses when people could not repay loans. Many people also reclaimed money from the unreasonable and unlawful charging practices.
The government realized early on that they must do something about the housing market if the economy was to recover. The UK fared better than many European countries, but the outlook was grim. The loss of the triple 'A' credit rating could also cost the county dear as the interest on national loans might go up.
They decided to keep the interest on mortgages low and to introduce a scheme to help people raise the deposit they needed to get onto the housing ladder. People who qualify for the financial assistance only need to find five percent deposit instead of the twenty that lenders demand. The country pays the rest for them, and they must start to repay that after five years. The estate agents in Stowmarket enjoyed a significant increase in business almost immediately thanks to that attractive offer. Unfortunately, the system came under much criticism when wealthy people used it as a smart way to finance the purchase of second homes. Of course, the government said that it would never happen.
The result is that between January 2013 and June 2014, the market has been healthy. The best months for house sales were November 2013 and June 2014. There were about 110000 residential property transactions according to government figures.
The result over the year is that there were 1,133,350 transactions with a value of ?40,000 and above.
The seasonally adjusted figure is 1,139,790 transactions.
Indeed, the market has outstripped all expectations, and the government is considering measures to calm it. They have several options at their fingertips, some that will only affect new buyers and others that could affect most people who pay a mortgage.
The first and most likely measure is to raise interest rates. They have been kept at a low rate for several years while the economy recovered. Now the financial state of the country is such that it can withstand a small rise. That will result in higher repayments for borrowers.
Qualification thresholds for mortgages could be made more stringent. If they reduce the number of buyers, demand for homes will drop, and prices will stabilize.
If they cancel or pause the Help To Buy Scheme, fewer people will be able to raise the deposit needed to buy a home. That is unfair in my opinion, because it denies some people the market to which they have a right.
Historically, the housing market has always bounced up and down. The laws of supply and demand are not as clear cut as you might at first think. I have no doubt that the measures will send the market into a slump sometime soon. Perhaps you would be wise to buy a house now before they come into force.
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