Estate Agents surge signals Housing Bubble

Estate Agent Surge Signals Housing BubbleThere are now 562,000 people employed in the property sector, making it the fastest-growing segment of the national workforce.1:56pm UK, Thursday 12 September 2013 Video: Economist: UK A Nation Of Estate Agents
Enlarge EmailA record number of people are working in estate agents, according to official figures, bringing fears that Britain may be on the verge of a housing bubble.

Over the past year, 77,000 have joined the sector with the number growing so quickly in the three months to the end of June that it amounts to the fastest growing segment of the national workforce.

There are now 562,000 employed in the property business, up 100,000 on the pre-crisis boom of 2008, the Office for National Statistics revealed.

In contrast, the building industry is 300,000 smaller than it was at its peak.

Chancellor George Osborne has dismissed fears that his Help To Buy policy will add to the risk of a housing bubble, despite calls for a rethink from Business Secretary Vince Cable.


Vince Cable has raised concerns about future housing costs

The current scheme allows buyers with only a 5% deposit to buy a new-build property valued at up to £600,000 - it will be extended in January to include a mortgage guarantee for buyers with deposits of between 5% and 20% to buy any age of home up to the same value.

But Mr Cable on Wednesday told Sky News the Government scheme should be reconsidered because of the risk.

"We should certainly think about how it should come into effect, indeed whether it should come into effect in the light of changing market conditions. We don't want a new housing bubble."


Chancellor George Osborne insists Help To Buy is a good idea

Other experts in the field agree, with the Royal Institution of Chartered Surveyors considering there is a "real risk" of housing inflationary pressures.

The Adam Smith Institute says the measures will raise demand for houses, but not supply and will therefore only exaggerate existing competition.

The institute says the Government needs to shake up planning laws to improve the supply and affordability of property.

"We're no longer a nation of shopkeepers," said Danny Gabay from economics consultancy Fathom, citing Napoleon's thoughts about the British, "We're becoming a nation of estate agents."