House prices in the UK have risen steadily as signs of economic recovery continue, reaching peak levels this year. A supply of new builds is giving people a larger supply of properties to choose from. Figures for July show that the price rises are slowing slightly compared to previous months but this is likely to only be a short term phenomenon.
The cause of the slowdown is the lack of buyer confidence as many people don’t believe that they will be able to buy a home in the next year. Changes to mortgage rules have also had a big impact as they mean lenders need to conduct much stricter affordability checks before they provide financing. This has left people worried they will fail to get financial help to buy a property.
House prices and demand are known to fluctuate month on month and the lack of confidence and demand is sure to only be temporary. In fact some parts of the UK, particularly London and the South West, are less affected and have seen steady demand. People may be worried about getting a mortgage because of the new stricter checks but it is in no way impossible to get one.
The downturn in price rises is also likely to only prove to be short term as more people start to see properties as investment opportunities. As demand returns so will the higher prices but it is important to remember that properties are better as a long term investment rather than an opportunity to make a quick profit. Property developers can profit from the short term cooling of prices by boosting their portfolios.