A recent report from the Council of Mortgage Lenders shows that lenders have started issuing more mortgages. First time home buyers took out about 27,000 mortgages in November, marking an increase of 6,000 mortgages over November of the previous year. This shows that the housing recovery could be starting to gain steam. However, some experts are worried that it could also signal a growing housing bubble.
Many experts are worried that the housing market is growing at an unsustainable pace. Here are some concerns that they have raised in recent months:
One real estate company reported that the average sales price increased to £210,000 in 2013 from £197,000 in the previous year. Economists feel that home prices are increasing more rapidly than the market is willing to bear. They feel that demand will start to decline in 2014 and house values will fall as a result.
While some experts are worried that a housing bubble may be forming, others are relieved that the market is starting to grow. Pete Redfern, the CEO of Taylor Wimpey, said that the market had been in the doldrums for the past few years. He said that his company is grateful that sales are beginning to pick up and expects they will continue to do so in the future.
There are a number of reasons that housing sales are beginning to increase. Some people have found it easier to make down payments on a new home after winning a major PPI claim or cash settlement. The economy is still stagnant, but it has started to show some signs of life. Some people may be investing in new property as they gain more confidence in the recovery.
It is still too early to say whether the rebound in the housing market will endure. However, Redfern and other professionals in the mortgage industry hope that it will continue to grow for the foreseeable future.