As house prices appear to be stalling at the moment, many experts are forecasting a short period of stability followed by a return to house price rises.  There is no doubt that the rise in UK interest rates is beginning to bite, but the balance of supply and demand is still no where near what it should be.  The UK has for many years ran a policy of building fewer new houses than the number required, due to a mixture of pressure from the house builders and “green” issues, which has resulted in a constant up trend for house prices.  So what does the future hold?

Unless we are able to adjust the balance between new builds and demand, many experts are predicting substantial house price increase over the next 10 years, with some suggesting the average house in London will cost in excess of £300,000, with the average for the country as a whole topping the £200,000 mark.  When you consider that some areas of the country are seeing houses priced at 11 times the average wage, what chance do first time buyer have to get on the property ladder?

In truth there is very little chance of the average first time buyer obtaining there own home in the traditional manner, and we are seeing more and more looking at the social housing option.  Many housing associations have seen a major increase in applications, with many running substantial waiting lists, leading to an increase in the number of social housing projects.  The stark fact that house prices have increased by 156% under the last 10 years of a Labour government, against an increase of just 35% in wages really brings home the obstacles now in the way of the traditional first time buyer.

While there is no doubt that the UK authorities need to act quickly to avoid further problems in the future, there is little sign of a major change in the housing policy – a worrying fact for any future first time buyers!