UK Housing Market Stagnates in the Run Up to the Election

With the market awash of properties due to the financial woes of many, property prices for many homes have struggled to grow in value during 2010. While many are calling for a tax break, it is unlikely however that this will occur with an election in the near future.

With much of the residential housing prices on a slight rise compared to the months before, it’s an encouraging sign, being that it is the eighth rise in the last nine months and the highest since levels seen last April. The national average cost for a new home has remained rather stable at around £169,000 over the last few months, which analysts say is a sign of stagnation in the housing market.

Many economists predict that the UK property market will remain flat for 2010 and may even carry on into the following year, if trends do not show signs of improvement. As the number of properties for sale is rising, this sheer fact will ensure that the property prices will resist rising.

There has been widespread speculation that the Bank of England will hold off on increasing interest rates until next year. This is in an attempt to boost the property market and allow for some relief for many. The market however has a long way to go before credit conditions are relaxed and people start borrowing again.

That said, until the election is a thing of the past, the UK property market will have to survive on incentives placed by the current government to help improve the current situation. One of these incentives is a two-year reprieve on the payment of a stamp duty. This would mean first-time homeowners that are looking at purchasing homes costing no more than £250,000 will be exempt from stamp duty, saving them a fortune and allowing them to make such a move.

Though until the new government is sworn in and its plans are revealed, a comprehensive plan is needed to restore the UK property market to its former glory. People are afraid to commit to any large purchases during this time including buying a home, thus keeping the industry in a wait-and-see vacuum.