Despite some pessimists predicting a slump in the housing market, others think that there could be an increase in house prices by up to 10%. Yes that’s correct 10%.
One large building society reported that house prices rose by 1.2% this month and the price of a house this year is 8.6% higher than it was this time last year.
This is a good and bad. The positives to this is that is shows the economy is getting back on its feet, but the negatives to this is that people will have to pay more to buy a home. The fact is that while the economy was booming houses were far too expensive. Even in the recession, which has this week just been officially announced as over, house prices were too high. For house prices to rise further shows signs of going back to the old days of rocketing house prices.
There is of course more to this story. House prices in the south east of England are rising much more than in the rest of the country as the demand for housing is growing and there is a shortage of housing available.
Whatever the case we need to make sure we do not go back to house prices rising beyond all comprehension as this only causes problems in the long term.