UK property booms, but experts predict aftermath of government stimulus

Property prices in the UK have soared to reach record breaking highs with the average house price standing at GBP261,743 and the annual house price growth rate hitting a seven year high of 9.5 per cent, according to the latest Halifax House Price Index figures.

As the property market continues to boom, economists and property experts consider the long-term implications of the measures implemented by the government to help stimulate the UK housing market.

‘Indubitably, the extended stamp duty holiday and the mortgage guarantee scheme have greatly contributed to the creation of this emergent house price bubble,’ says Simon Das, founder of specialist property finance brokerage 978 Finance, ‘it will be most interesting to see how the UK property market responds in the aftermath of such measures ultimately being rescinded'.

Martin Lewis, a long-standing critic and opponent of the government’s measures has argued that the measures have prioritised a short-term benefit to the housing market over the future longer-term needs of the nation’s homeowners.

Similarly, other industry real estate experts have voiced their concerns that the government measures have artificially propped up the housing market which will inevitably contribute to an eventual market crash. Matthew Cooper, Managing Director of Yes Homebuyers has reportedly stated, ‘the government’s insistence on artificially fuelling house prices, not only with a stamp duty holiday extension but now in the form of 95 per cent mortgages and a rehash of the Help to Buy scheme, is irresponsible, to say the least. Enjoy the boom while it lasts because if history has taught us anything, a bust is likely to follow’.