Buying a starter home
Brexit uncertainty has been a reason for a slowdown in property markets in the England and Wales, especially, in conditions when the unemployment rate remains at 40 year low. European Commissioner Guenther Oettinger believes Britain will vote in favor of Brexit in January and the conclusion of a deal in March can lead to fluctuation in-home price, even though, the house price is flat-lining overall in England and Wales, average property prices grew in months to November. In November house price increased slightly, as the market almost remained subdued during this time.
Berkeley Group claims the short-term outlook of the market was undecided and uncertainty was significant, in terms of, low investments and low transaction volumes. There are other issues related to the current problems such as the increase in interest rates by the Bank of England, which can augment borrowing costs and further, lead to affordability issues.
Shortage and Unaffordability
Shortage of houses has been the main reason for the lack of housing deals and other factors responsible is unaffordability due to the growth in demand from international investors, amidst an increase in stamp duties and capital gains, where investors from East Asia, Middle East, and Russia are investing in the UK and especially, London homes. London is favored by these investors, where 75 percent of international investors are spending due to safe political and economic factors. Rents grew 22 percent during the time and inflation rose 24 percent.
During the financial crisis, the markets fell 60 percent and there has been significant growth in construction in the last few years, where the number of the newly built home was 195,300 that were 3 percent below the new built-in 2007 -2008.
Let-ins and Student Accommodation
The rental growth on new let-ins grew 2 percent in October. Many first-time buyers are looking at 2019 as the year to get on the property ladder where they are supported by the government schemes but the supply remains low. The falling prices can be taken as an opportunity to procure properties at lower rates. The student markets and buy-to-lets are performing in some region where the CBRE reports found the growth in gross rents was 3 percent and net rent grew 3.4 percent in the last twelve months. Economists believe the increase in house rates can lead to the situation where investors will have to pay about 9.7 times their salary on buying a newly built England and Wales house ( as per ONS data 2017, in 1997 the investors where paying 4.6 times the salary).
The report by Nationwide states the average UK home price increased 0.3 percent on November month-on-month and it led to rising in annual rates by 1.9 percent, although, the prices fell nearly £500 in the last month. Halifax reports claim the price in November grew 0.3 percent y-oy to November.
There are some markets outside the southeast where the buyers are chasing property rates; despite, a shortage some buyers are grabbing the opportunities.
To know more about UK properties, click Hamilton International Estates (www.hamiltoninternationalestates.com).