The economic slump down might have staggered a bit with the recent graphs showing a slow but steady improvement in a market that was inflicted by the massive economical onslaught called recession. It seemed that the market would gradually revive from its darkest of hours and the nation would be back to its feet. But when everything seemed to be steadily going back to its place, to much disarray it has been noted that the house prices are rising continually despite a marked increase in the number of residential homes coming in to the market.
This startling report has been revealed by the Royal Institution of Chartered Surveyors (Rics) which says that the housing prices saw a mammoth rise in the month of October, the first of its kind since December 2006. As per the reports, London is the frontrunner in the price movement as the estate agents reported rises going upto a whooping 95%, which is recorded as the highest rise since 1996. Economists have stated that the low number of properties for sale could be possibly one of the main reasons for the ongoing increase in the housing rates. Surveyors say that although there has been a noticeable increase in the number of homes coming into the market, the number of people registering themselves to buy the properties have slowed down considerably for the consecutive fourth month. According to the housing experts, there is still an acute shortage of supply. Therefore it is expected that the housing prices will be on the rise atleast for the next three months.
According to spokesman Jeremy Leaf, “Although the supply of property is beginning to pick up, it is still insufficient to keep pace with the increase in demand, which points to further prices gains in the near term.” Leaf adds, “CHeap money remains a critical prop for the market and this is being reflected in the continuing appetite for finance for first-time buyers, despite the large deposits still being demanded by lenders.”
The present scuffling of housing rates is expected to continue for some time, at least for the next three months. Some economists blamed recession for the upturn. The positive outcome from the ongoing chaos could be that certain analysers believe the housing prices will be right back on its track sometime next year. According to Howard Archer, chief UK and European economist at IHS, “While House prices may well rise in the near term from their early 2009 lows, we suspect they will be prone to significant relapses further out. We believe that the house prices will be at least 5% lower at the end of 2010 compared to now., and would not be surprised if the slippage is greater still.”
It has been further noted that a high percentage of home owners are unable to live their land as planned because they are not able to sell off their land at a price they would have wanted to. The only saving grace lies in the hands of the rising economy, which if at all takes a positive turn can then bring back the steep housing prices back to its original market value.
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