House prices have risen at their fastest pace in over seven years; this is according to information provided by Nationwide. Many are now worrying about a housing bubble which could burst due to many first time buyers being priced out of the market.
Bank of England Governor Mark Carney has already warned the housing market is a very big risk that could damage the UK`s recovery. The main reason is the lack of new home building; it is thought the Bank of England will try to curb the growth by increasing measures to control mortgage lending.
Demand for homes will continue to be strong, with the economy growing at its fastest rate combined to new job creation and businesses starting to perform well will increase the demand for properties over the next term.
Update: June 2016
House prices: Eurozone buyers looking to snap up Brexit-boosted bargains.
According to a news report from The Week.co.uk, the uncertainty over the referendum has caused the pound to fluctuate, which means buyers from the single currency EU zone have saved an average £26,000 when buying up London properties.
Bargains are to be had and European buyers are rushing to snap them up quickly. According to the Office of National Statistics, average house prices in London currently stands at around €596,900. However, on the run up to Christmas last year, the financial markets were more confident about a Remain win, so the pound was much stronger against the Euro and the average was around the €630,100 mark.
If you do the maths, the drop in the pound close to the referendum has given buyers an average saving of 5.3 per cent, or around £25,500 in savings on average.
Chancellor George Osborne had predicted a possible drop of 18 per cent fall in house price values over the two years following a Brexit vote success, fearing economic shock and reduced demand from overseas buyers.
On the Leave side of the coin, campaigners are not disagreeing with George Osborne, but say the effect of reducing house prices following a Leave vote will mean property will become more affordable for young people stepping onto the housing ladder.
Some economists have said that should we leave the EU and house prices decline, this will in turn make London property prices even more appealing for foreign buyers, especially if the pound weakens to a level on par with the euro.
What we could eventually see is Eurozone buyers becoming even more active on the London property market should we decide to Brexit.