Is it safe to look at short-term house price performance?
This week's news that UK house prices have risen year-on-year for the first time since March 2008 has injected a dose of enthusiasm back into the UK investment market but is it safe to take one month's figures in isolation and make investment decisions upon these?
While the truth is there have been a number of positive months in the UK property market, there would appear to be a great variance across the country and indeed many people believe a lack of quality property on the market is squeezing prices higher and higher. Let's not forget that a great number of UK property developments were suspended or mothballed during the recession and many of these will be coming back online in the short to medium term.
Indeed the UK government has put aside £388 million to assist these mothballed developments which will obviously lead to an increase in property coming to the market and could at best hold prices back and at worst see a reduction. There is no doubt that the national house price performance figures have been influenced by certain "hotspot" areas such as London and the South of England and it would be dangerous to assume there is a recovery across the board.
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