The Housing Markets Booming; What Does it Mean for You?

This month has seen the release of two separate pieces of data which highlight just how strong the UK housing market recovery has become. What does this mean for you?

Did any of you Kiran Trivedi readers try to enter the housing market during the recession? It was a nightmare; you couldn’t sell your house because prices were too low and you couldn’t buy one because banks were reluctant to approve mortgages.

However this month has seen the release of data that proves this is no longer the case, the housing market is finally recovering and this really means something for your personal finances if you are looking to enter this once risky market.

First off Nationwide released figures this month that proved that house prices increased by a rate of 0.7% in January of 2014. Furthermore nationwide reported that from the same time last year, the rate had in fact gone up 8.8%.

Specifically the building society revealed that according to its data, it measured the average UK house price at £176,491. This was based on Nationwide’s own mortgage data. Robert Gardiner, chief economist at Nationwide commented to the BBC that this indicates that house prices are returning to “more normal” levels.

This news was accompanied by a report suggesting that mortgage approval rates saw a massive leap in 2013. Data released by the Bank of England suggests that approved house purchases rose by a rate of 20%.

This means that 734,969 mortgages were approved in 2013, up from 612,654. Mark Harris, chief executive of mortgage broker SPF Private Clients weighted in on these figures, as reported by the BBC.

He said that “we expect this to continue this year as Help to Buy [government-backed mortgage scheme] gets into its stride and lending appetite remains strong, with most lenders aiming to do more lending than they did last year."

So what does this mean for your personal finances? On their own both pieces of news would have little impact. Rising house prices without the ability to pay them are useless to everyone and mortgage approval going up wouldn’t mean much if you’re still forced to sell your old home for a loss.

However together they indicate that it may be time to enter the housing market. Not only will you be able to once again make a profit on your old home, you’ll be able to use that to lock in a mortgage to buy a new one.

In this case it’s clear that everybody wins. It looks like if you’re thinking about getting into the housing market, 2014 just might be the time.