UK Property Markets Rising?
"A Conservative government will act now on debt to get the economy moving. We will deal with the deficit more quickly than Labour, so that mortgage rates stay lower for longer with the Conservatives." - Conservative Manifesto
Something that always affects the property market in Britain, as elsewhere, is the availability of credit to purchase costly sections of land. Without the financial means to fairly compensate an owner for his/her land, there is either unfair compensation (under-payment or outright theft) or there is no deal.
The first option is sometimes, in rare instances, acceptable to enlightened societies like Britain, where the eminent domain of the government takes precedence and certain tracts of land are set aside for public use, with little or no fair-market value going to the previous owner. An example of this is the thin strip of land used for railways.
But the other side of that, no deal, is far more detrimental to human welfare, because it seriously obstructs the rational use and development of land, waterways, beachfronts, mountains, forests or underground mines simply because there is no credit mechanism available to acknowledge and enable transfer of the lands from one owner to another for the greater good.
So a government willing and able to act now to get rational debt, debt instruments and debt-service mechanisms into the hands of rational risk-takers and entrepreneurs among their people is a sign of faith in the proven creativity of humans, and British are among the world’s most renowned inventors and innovators.
Likewise, dealing with consumer debt and corporate debt is a logical step in a good direction if it results in improved conditions overall for buyers and sellers, as is the case with the property market in Britain.
Without buyers there can be no sellers, and that means no tax for any government. But without financial means to buy, there can be no buyers, and that means no taxes for government.
In summary, the timely and effective efforts of government to bring about a credit market where credit is available to qualified borrowers is a policy which should actively enhance the property market in the UK. Couple that with the fixed low interest rates on mortgages and there is a solid framework for continued growth and vigor in Britain’s property markets and housing markets for the foreseeable future.
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Is there any areas in the UK where there is still a sharp rising property market?
Buy low sell high scenarios.
Yes. Some areas of London are still rising - Tower Hamlets for example.How do youngsters get onto the first rung of the property market here in the UK?
I have two teenagers. Here in the UK, property prices keep rising well above inflation. Soon,my kids will immediately be saddled with huge debts to pay off.
Do any of you guys from other countries have similar problems regarding the price of property for first time buyers?
What are your average house prices for a kid's first time property?
People in the UK, do you have similar problems in your area?Please state the area concerned.
here in northern ireland we have the same problem. our house prices are the fastest growing in europe according to news this week. the average price of a very small terrace home is about 170k. this means a young couple would need to save about 17k for a 10% deposit. almost an impossible feat as they are probably paying rent at the same time. i feel sorry for young couples today. my own home cost 39k 8 years ago and is now valued at 180k. crazy. if there is a crash they also face negative equity and thats a scary prospect too. i'm just glad i'm not starting off now. good luck to your childrenHow far will the UK property market fall ?
When will house prices start to rise again ?
65% I assume.
Most houses in the UK are really old and run-down and have low-standards. So in this case you can compare it to the market for old cars that are not oldtimers - prices go down and down until nobody wants to have them anymore. The only difference is that the land it sits on is valueable - but the houses themselves are not worth anything...the best would be to knock them down and build something reasonable instead.
If this sounds weird to you, go an travel to other countries and look at the houses there - then you will never want to live in an average house in the UK again. 99% of UK houses are boring, ugly and have not many rooms....not very nice bathrooms, kitches and the ceilings are extremely low....only slightly higher then the door height.--but still they costs a multiple of the price of nicer houses abroad and people still suffer from the misconception that this was a great long-term investment.
If you have 3 or 4 children and need at least 6 rooms, you need to be a millionaire in the UK to find a decent house with a garden....and still live like someone poor.Do you think the worst of the property slump in th UK is over?
It appears the house prices have dropped but are now on the up again. Speaking to various people I know in the property market, prices will rise again, but slower than they did before. I have seen some estate agents who struggled to even sell a couple of properties per month, selling more already this August. What are your thoughts?
Property prices are very dependent on the area you want to purchase in, and the type of property you can afford.Is now the right time to be buying property?
With the recent slowing down in the property market and rise in interest rates in the UK...
go to jail do not pass go do not collect $200Are Property Prices likely to fall in the UK like they are in the US?
The American property market is now falling on a year by year basis - we are told that UK house prices are overvalued if we look at the rise compared to the increases in people's incomes, will we see similar drops in value here? What is likely to crystalise this situation?
i sure do hope so! :-P
what goes up must come downAny advice on purchasing a property to rent out in florida. I already had some advice but this is a huge leap?
I live in the uk and will have been to florida four times by feb 08. I love the place and also want to invest in a property to rent out. I thought that combinig the two, ie a place that i love and the desire to invest in a propery would be a good idea, also the statistics say that orlando is the tourist capital of the world, having some 42million visitors last year and still rising as they build more parks (Sea Worlds Aquatica and also Harry Potter world). The strong pound against the dollar and also the property market slump in prisec all seemed to add up to a good deal. I would not purchase the property with the dependancy that the rent would cover the mortgage. Any experience and advice would be gretaly received.
Try to search through this searching system www.zzzoff.com and it differs very much from Google and Yahoo. Our main difference is that the information is searched by PEOPLE, not by machines.Is there a problem with the UK economy?
Assuming you are still working and earning the same of slightly better money how can it be that if your house was put back on the property market (assuming it has made money) you would not be able to afford to buy it? I.e i paid £97000 for my flat 5 years ago, its now worth £210,000 because of the increase in property prices. I would not be able to afford to buy it at the new sale price as no lender would lend me enough money based on my wage! Surely this is an indication of an economy going bad? Surely wages should rise in line with the property market?
Ok i will ask the question another way. If wages are used to buy utilities, goods and services and these items are subject to inflation set by the bank of England why are house prices not subject to the same factors, instead they increase based on demand? Wages buy houses so a rent wages being devalued by inflated house prices and therefore the pound is being devalued.
Do you mean as a first time buyer? You yourself should be able to afford it due to the equity you would have accrued.
Linking wages to property prices couldn't work, since more and more people will require housing and supply is not meeting demand, so prices will continue to rise disproportinatelydoes this mean the housing market is going to fall?
http://news.bbc.co.uk/1/hi/business/6172088.stm
House prices 'set for slowdown'
UK property wealth has tripled in the past 10 years
The UK's rampant house price inflation is likely to slow down dramatically in the next year or two, according to a former government economic adviser.
The prediction comes from David Miles, the Morgan Stanley chief UK economist.
House prices have risen more than twice as fast as general inflation in the past 10 years.
But Mr Miles, a former government adviser on the mortgage market, says house prices will soon slow down so much they lag behind general inflation.
We are likely to have significant falls in real house prices once those expectations come down, but... the timing is very hard to fathom
David Miles, Morgan Stanley
Housing market: facts
Why are house prices high?
First-time buyer woes
However, Mr Miles cautions that predicting exactly when prices may fall is extremely difficult.
"A substantial fall in real house prices is likely at some point in the relatively near future, though it could yet be one or two years away," he warned.
Three years ago, Mr Miles wrote a review of the UK mortgage market for Chancellor Gordon Brown.
Coming bust?
This latest report, entitled UK Housing: How did we get here, is the latest prediction that the current house price boom will come to an end some time soon.
Earlier this month, accountancy firm PricewaterhouseCoopers predicted there was a one-in-three chance of UK house prices falling by 2010.
And last week, the Financial Services Authority (FSA) warned banks to make sure they could survive if house prices fell by as much as 40%.
This year, however, prices have started to accelerate again and are now running about 8% higher than a year ago.
Recent figures from the Land Registry revealed that the average property in England & Wales now costs more than £200,000.
Speculative expectations
In absolute terms, UK house prices have almost tripled in the past decade, but compared with the rise in prices generally, "real" house prices have roughly doubled - up by 112%.
Mr Miles says the single biggest factor driving up house prices in the past decade has been the expectation of buyers that prices will keep on rising.
As well as speculative expectations, the main factors pinpointed by Mr Miles are the rise in people's incomes, the rapid growth of the population and the cheap cost of borrowing due to low interest rates.
Of these, he says the expectation that prices will keep on rising by about 10% every year has accounted for between one-third and half of the excessive rise in prices seen in the past 10 years.
"We are likely to have significant falls in real house prices once those expectations come down," he warns.
"But our simulations suggest the timing is very hard to fathom."
Eventually yes they will have to fall!! Prices are rising at an alarming rate, and it will get to the point where it will be difficult for many people to afford to buy their own home. As the saying goes "what goes up has to come down".Will UK house prices ever come back down?
I still live with my folks but am saving for my first house together with my partner.... Only problem is, house prices seem to be rising much faster than we can save! I dont know too much about the property market, but it seems like we've missed the boat, like we'll never get on the property ladder - or we will JUST make it, and then the prices will crash! Anyone have any predicitons or words of advice? Will the market crash, and if so, when?!?
Simple combination really, small island, you can't manufacture land so there is no way land prices will drop( unless Labour really hands over our Green Belt areas and if that happens would you want to live here ?) and land prices are the main cost in building new homes. How about learning some renovation skills and looking for property that needs a lot of work, remember your labour costs nothing.