Britain’s housing market is showing strong signs of recovery, largely on the back of surging prices in and around London, fueling fears of a new property bubble, analysts say.
The average cost of a home in the English capital surged by 10 percent between July and this month compared with the third quarter of last year, British bank and major mortgage provider Nationwide Building Society said on Friday.
It added that the average London home, including apartments and houses, now costs £331,338 (US$532,700), 8 percent higher than in 2007 or during the run-up to the global financial crisis that eventually led to prices crashing.
Across Britain, the average price of a home stands at £170,918, after gaining 4.3 percent annually in the third quarter, Nationwide said.
“The acceleration in house prices ... reported by the Nationwide will fuel concern that we could be on our way to a new housing bubble,” said Howard Archer, chief UK economist at research group IHS Global Insight.
“Housing market activity is now really stepping up a gear, supported by markedly strengthening consumer confidence and elevated employment, and fueled by” government initiatives, Archer said.
“On top of this, the Bank of England has indicated that interest rates are unlikely to rise before mid-2016, which seems likely to give many people greater confidence in their ability to purchase a house,” he added.
The government launched a new program called “Help to Buy” earlier this year, offering interest-free loans for a set time period to help buyers purchase newly built properties with only a 5 percent deposit.
The scheme will be extended in January to offer mortgage guarantees for new and existing homes worth up to £600,000.
People will not be allowed to benefit from the scheme if they intend to own more than one property.
Meanwhile, the current state of the housing market has led to divisions in the governing Conservative-Liberal Democrat coalition.
Outspoken British Secretary of State for Business, Innovation and Skills Vince Cable, a Liberal Democrat, has warned that Help To Buy could fuel a new bubble.
However, UK Chancellor of the Exchequer George Osborne, of the Conservative Party, maintains that the scheme is needed to help homebuyers find sufficient deposits.
Britain’s housing market has been bolstered in part by the country’s economic recovery in the first half of the year and on keen demand from cash-rich foreign buyers, particularly for investment property in London.
Analysts also blame a shortage of affordable property for the current boost in prices and estate agencies are reaping the rewards, with upmarket group Foxtons Group PLC enjoying a strong stock market debut this month.
Foxtons and its rivals are also benefiting from rising rental values, which experts say is a consequence of people struggling to afford to buy homes.
Amid market concerns, the Bank of England two weeks ago insisted that it would remain “vigilant” and was ready to act over the threat of a dangerous property bubble.
“There has been much discussion recently on whether the upturn in the UK housing market is too vigorous,” Capital Economics Ltd analyst Matthew Poignton said. “Our view is that housing is already overvalued ... and that makes any further gains in prices a matter for concern.”
BNP Paribas economist David Tinsley said prices were being driven by a lack of supply, but cautioned against speaking too quickly about a potential bubble.
“The argument that there is a housing bubble in the UK right now is not persuasive,” Tinsley wrote in a note to clients.
“Arguably, there is a deep-seated supply problem in the UK, which is forcing up the real price of housing, but that is not the same thing” as a bubble leading to a crash, he said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”