Property surveys and estimations taken out in May have shown that UK house prices are expected to accelerate at their fastest rate in four years in 2013. London prices are, unsurprisingly, expected to pull away from the pack and outstrip the nationwide averages, as large numbers of investors continue to seek opportunities in the capital.
The combination of constistently lenient interest rates and lending incentives from the government are teaming up to encourage the property market growth, though some experts comment that prices could be seen as overvalued. The study, undertaken just last week, estimated that house prices are set to enjoy a 2x increase; on the contrary to the bleak predictions of a few months ago.
Despite the more challenging economic climate of the past two years, the UK economy is currently expected to deliver growth of approximately 1% this year, rising to 1.5% in 2014. A return to the house prices of 2007, which saw UK property prices triple in just 10 years, are still expected to be a long way off according to a number of experts.
April 2013 saw the average house price at just over £165,000, which is more than six times the average annual earnings of the average Briton in the same year (£26,500.) In light of these statistics, respondents to a survey largely agreed that the average house prices remain far too high. The Bank of England is certainly doing its bit to stimulate positive growth in the UK, through its dramatic lowering of interest rates to 0.5% which is expected to remain for at least another two years. Alongside this, the Bank of England are also continuing their 'Funding for Lending' scheme which give lenders a significantly lowered rate of finance if they use the borrowed money to lend for housing purchases.
The early indicators of how the property market is going to react in coming years is largely judged on the amount of mortgage approvals, which continued its rise until it reached just over 53,500 in March. Experts believe that as we approach the end of the year, the average will be closer to 57,000 per month and more like 64,000 in twelve months.