Pent-up demand in the housing market may cause house prices to rise by the end of 2009, reported the BBC this week. Although such a prediction would have been unthinkable a few months ago, Nationwide has said that there is a reasonable chance that house prices will finish the year higher then they started.
There has been a pool of buyers who have had the funds to buy throughout the credit crunch, but due to lack of confidence in the economic conditions were reticent to buy. Encouraged by low interest rates these buyers have come back to the market. Added to that, few houses have come onto the market which has buoyed prices up as the demand has outstripped supply. The only factors which may keep a rise in house prices in check could be “the squeeze on earnings and rental incomes and the rise in unemployment”.
The recent rise in mortgage approvals over the last few months revealed by the Bank of England, also suggests that there will be greater activity in the housing market over the next few months.
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