"Those fearing a return to a credit-fueled bubble will be reassured by the teeth of the new rules and how they are clamping down on the aspirations of some of the early applicants into the Help to Buy mortgage arena"
- Miles Shipside, Rightmove director
Concerns over a growing housing bubble in the U.K. have eased on Monday, as data from Rightmove Plc showed asking home prices fell this month after a 10% hike in October, suggesting government schemes to boost demand for property failed to offset the typical pre-Christmas decline. Values in London plunged 5% in November, to an average of 517,276 pounds, while across England and Wales, prices fell by 2.4%.
While estate agents across the country are reporting government schemes have definitely contributed to the growth of a housing market, the latest research shows that challenges, limitations and benefits of these programmes are still not fully understood, hence, they are working not at its full capacity. Furthermore, a lack of the end date of the recently-launched Help to Buy programme may lead to a serious distortion in the property market. The concern over programme's feasibility is based on statistics. Last week, David Cameron claimed that 2,384 people have been already accepted for a mortgage under the programme; however, just 10 of the applications were completed so far. And without a clear exit strategy potential home-buyers are likely to remain cautious and will not show willingness to make huge purchases. Nevertheless, Monday's report is suggesting there is no risk of a looming housing bubble in the U.K., while government schemes needed to be improved to achieve a long-term sustain demand for property.
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