High demand for property creates house price bubble

According to a recent report the high demand for property from potential buyers has resulted in a house price bubble being formed in the UK.

Recently released figures have shown that the number of people selling property is outnumbered by the number of people wanting to buy property at a rate of five to one, and this has resulted in a house price bubble being formed.

Figures were released by the National Association of Estate Agents, and officials from the group said that for the month of October the average number of property hunters on estate agents’ books came in at two hundred and eighty seven whereas the average number of property sellers on the books came in at just fifty seven.

The group said that demand for properties compared to supply of homes by sellers was driving up property prices.

One official from the group said: ‘There is strong demand for property and more optimism in the housing market than we have seen for months. This is good news for the recovery of the market and for the UK economy in general.’

He also said that the government and the banking industry needed ‘to do more to keep the momentum of market recovery going’

Many first time buyers may view this as a good time to try and get onto the property ladder, with some lenders now prepared to take smaller deposits, the stamp duty extension still available for the remainder of this year, and the base intrest rate still at its all time low of just 0.5 percent.

On the other hand property prices are still far lower than they were at their peak in 2007, and this is leading to many homeowners feeling reluctant to sell their property at this current time.