Is the Bubble about to burst? …Probably!

by carter1927

ImageBarely a day passes without someone asking me “What’s going to happen to house prices over the next 12 months?” This is of course to be fully expected as an estate agent and I answer as I have always done for the past 25 years…. “If I knew the answer to that question then I’d be a millionaire”

Of course it’s a perfectly valid question to ask and I should be in a position to answer with at least some degree of conviction based on current market trends and the general economic and political conditions.

2014 has seen a significant upturn in prices in Denham with many properties worth at least 10% more than they were this time last year. As I have previously written, the Help to Buy scheme introduced last year has been a major stimulus to demand and therefore prices. Indeed anybody who bought in the last 18 months is entitled to feel a little smug as they have seen an instant uplift in the value of their property.

How long will this rampant house price inflation continue and is it a bubble that is about to burst?

Well there are a number of factors that suggest prices have peaked and if you are thinking of selling, now might just be the right time. Consider the following:

–          Anecdotal experience of a slow-down in price rises is borne out by evidence from mortgage lenders and the web portals about both asking and sold prices. Supply is starting to catch up with demand

–          New lending regulations introduced in April after the Mortgage Market Review means that mortgage applications are now subject to tougher affordability requirements.

–          The Government has got nervous about house price increases particularly in London and George Osbourne’s recent Mansion House speech means the Bank of England will have powers to cap mortgage lending.

–          Prices have increased beyond the previous peak of 2007 and the spectre of negative equity and resultant repossessions has appeared to have receded.

–          Interest rates are only going to increase. Interest rates have been at a record low for over 5 years now. They can only go one way. The Bank of England has hinted at it and we are likely to see increases both before and after the General Election next year.


The time to buy or sell your property can often be a difficult decision although it is mainly determined by your own individual circumstances. The expression “safe as houses” continues to ring true as most people still see the significant benefits of owning property as a long term investment. If you are in the position to decide when to sell then maybe now is the right time. You might just feel a little smug if the bubble does indeed burst.


If you would like a free no obligation market appraisal of your property or to speak to Adrian about selling your property, call Carters on 01895 832155