Are you a housing market winner or a loser?

The UK housing market is showing signs of strength again

It seems life is returning to the UK housing market, with prices being driven up by improving consumer confidence and higher employment, as well as schemes like Funding for Lending and Help to Buy.

Prices in the year to June rose by 3.1%, according to the Office for National Statistics (ONS), up from 2.9% in May.

A separate industry survey from the Royal Institution of Chartered Surveyors (Rics) says prices are rising at their fastest rate since November 2006.

The word "recovery" has positive connotations, but when it comes to housing, where there are winners, there must also be losers.

Haves and Have-Nots

Of course, the most obvious winners and losers are those who have already bought and those who can only long to do so.

Analysts at IHS Global Insight estimate that, across the board, prices will rise by at least 3% over the rest of 2013 and then increase by 7% in 2014.

This will push the dream of home ownership yet further away for those struggling to buy now.

But the lot of the homeowner is not a uniformly happy one.

People who have seen the price of their property fall below the value of their mortgage do not see themselves as fortunate, but stuck.

This week's news at least indicates rising property values are spreading beyond the recent hotspots, benefiting a wider spread of owners.

For years, the often-quoted UK-wide house price figure has disguised a two-speed market driven by London and the South East.

While this is still the case, Rics' figures suggest that homebuyer activity is increasing fastest in parts of the UK where prices have been the most depressed.

The largest rise in activity came in the West Midlands and north-east England.

Rental market

Another group who could benefit are those tenants who have seen rents rise inexorably in recent years.

"Because the residential sales market has been a little bit stagnant over the last few years, we've seen quite significant rises in rental figures," says Peter Bolton-King from Rics.

"You'd like to think that if people start to move, then there will be more properties to rent."

An increase in supply should mean landlords have to work harder to tempt tenants to move in.

This could be helped by a rise in buy-to-let mortgages being granted.

The Council of Mortgage Lenders says the value of these loans topped £5bn in the second quarter of 2013, up 19% by volume and 31% higher by value on the previous year (albeit from a low base).

The Economy

It is often said the biggest beneficiary of a strong housing market is the wider economy, as confident homeowners hit the High Street in search of delightful drapes and cool kitchenware.

Recent figures from the High Street have shown rising consumer confidence has indeed boosted sales, but whether this is linked to house prices is far from clear.

A classic way of proving such a link is the Bank of England's Housing Equity Withdrawal figures, which, before the financial crisis, told a tale of people taking big loans against their properties that they would then splash on tasteful soft furnishings and the like.

However, the recent numbers show home owners are doing exactly the opposite and are instead working hard to pay off their debts.

The latest figures show that, in the three months to the end of March 2013, homeowners put £8.8bn more into their homes than they took out.

Compare that with the last quarter of 2006, not long before the bubble popped, when people borrowed £12.6bn more than they paid back.

"Despite positive sentiment, these figures confirm that homeowners are still hunkering down, rather than leveraging their home to spend money in the wider economy," says independent housing expert Henry Pryor.

In one of the great conundrums of our time, this phenomenon is seen by others as a good sign for the economy in the longer term. After all, it was people drowning in a sea of debt that got us into trouble in the first place.

Everyone

One of the big drivers of the house price increases has been interventions from the government in the form of the Funding for Lending and Help to Buy schemes, which are designed to give house buyers easier access to loans.

Concerns have been voiced that a new wave of cheap credit, particularly through the Help to Buy scheme, in which the government helps with a deposit, could lead to another housing bubble.

This could burst when interest rates finally rise, causing prices to plummet. Again.

In this scenario, almost everyone ends up being a loser.

New government figures suggest there have been 10,000 registrations under Help to Buy since April, which is due to be extended to buyers of pre-built homes in 2014.

Howard Archer, chief UK economist at IHS, said there was a "serious and mounting concern" about a bubble developing, but not in the near term, as there was still significant pressure on many households.

"Policymakers must be prepared to quickly pull the plug on the Help to Buy mortgage guarantee scheme at the first sign of any housing price bubble developing," he said.

But at a recent press conference, Bank of England chief economist Spencer Dale denied the scheme was fuelling a bubble.

"The current run rate of [Help to Buy] is something like 3% or 4% of total housing transactions," he said.

"It's done its job in terms of encouraging new house-building, but the idea that it is somehow fuelling a housing boom doesn't stack up in terms of the numbers."

There's also the small matter of inflation, which currently stands at 2.8% - take that away from the 3.1% house price growth noted by the ONS and talk of a bubble does seem premature.

Political winners

What a rising housing market means for politicians is open to debate.

Some believe a rising market will play into the hands of the government, the Conservatives in particular, and note that the Help to Buy scheme extends past the next general election.

But if that is true, what of those who see home ownership slip ever further away as prices increase?

The latest figures from the ONS show that, in England and Wales at least, those owning properties outstripped those renting by almost two-to-one in 2011, meaning playing to the ownership crowd seems a smart move.

What those same owners think if their children are priced out of the market, forcing the Bank of Mum and Dad to swing into action, is another matter altogether.

But however the latest housing saga pans out, one thing is certain: the British obsession with home ownership will doubtless remain as strong as ever.