May keeps up it’s bullish reputation

This spring season has seen a national property average price rise of 3.6%, nearly a whopping £10,000, pushing the national average up to a record high of £272,003, said to be caused by the combination of the Easter and May bank holidays causing a lull in the number of properties coming to market at a time of high demand.

Whilst demand for housing remains strong (up by nearly 20% for Rightmove enquiries so far for 2014), the supply of new properties just can’t keep up. Early 2014 appeared to be a tease, fondling with an increase in new sellers.

Annually, the rate of increase is now 8.9% (the highest rise since October 2007 when it stood at 10.4%), yet whilst the housing market momentum is recovering, London is still letting the team down. New seller asking price in the big streets of London is up by 16.3% compared to an average of 4.9% in the rest of small town England and Wales. Translation? 2014 asking prices are up by around £4,405 per week in London whilst the weekly average for the rest of us is £1,521.

Indeed, outside London and its commuter belt, demand may be better balanced with supply by the more stringent checks and affordability tests under the Mortgage Market Review (MMR) that became mandatory less than a month ago. The main conclusion at present is that the delays in lenders’ processing systems are curtailing lending, with it being too early to comment whether mainstream buyer activity will have a significant drop-off from the new controls.

Where a major imbalance exists between supply and demand the long-term solution has to be to create more housing supply to meet any structural need rather than to artificially hold down demand. But with Spring over and the summer fast approaching, the lull in the market can only get better! This is where we come in! Here at The House Crowd, we believe Investors should “crowd” together, each providing a small amount of the money needed to purchase a suitable investment property at a good price,  typically an empty or run down property where we can add value through refurbishment. This in turn improves the supply of the housing market, creating fair value for money.

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