Is house price hysteria calming down?

A survey by the Royal Institute of Chartered Surveyors says growth in demand for homes has fallen. Glass-half-empty types might say this is the beginning of the end for the property bubble...

by Emma Haslett
Last Updated: 13 Mar 2014

Have home buyers finally decided property costs too much? The Royal Institute of Chartered Surveyors (RICS to its friends), says growth in demand was at its lowest for almost a year in February. Perhaps Help to Buy fever is dying down…

Let’s not get ahead of ourselves: prices are still rising. RICS said 45% more chartered surveyors reckoned prices rose rather than fell during February, meaning house prices across the UK have now risen for 11 consecutive months. (According to the Office for National Statistics the average home is now £250,000. Ouch).

It looks like all is not lost quite yet: what’s likely is that ‘pent-up demand’ during the recession has now been absorbed. The initial feeding frenzy for buyers who couldn’t get a decent deal on a mortgage during the recession is over - but demand will continue to grow, albeit at a slower rate.

For what it’s worth, MT is keeping a close eye on the Chinese economy to decide when to pounce on the housing market. If the Chinese government does, as commentators have suggested, turn out to be leading us on the economic equivalent of a wild goose chase, it will spell disaster for the many Chinese investors in the London housing market. MT might finally be able to afford that ex-local authority one-bed it’s always dreamed of...

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