Growing Polarization In The UK Property Markets
07 Aug 2019
UK Property Market News
The RICS survey of the UK property market finds the demand from new buyers increased in 7 out of 12 regions, where almost 10% of the respondents reported growth than a fall.
The Home Service comparison website's forecast predicts a price boost of 1.2% in the three months from June to September. However, the chartered surveyors said growth in new instructions where the agreed sale remained negative, and the sales expectations were at 12 months highest since February 2017.
Buyers are showing new interest in property markets, and the homeowners are considering selling their properties. This June, the net first-time buyer's inquiries reached the highest since 2016, and many assumed the key markets like London were settling down, where the rents are forecast to grow at the rate of 2.4% over the next five years.
According to the OECD house price reports, the price of homes in developed nations increased 32% from the 2009 troughs. The prices in the UK grew a fifth from 2009 lows.
The growth in wages has been slow in comparison, and unaffordability issues can be seen in the UK due to growing expenses on homes relative to the wages; at the same time, the low mortgage rate has been supporting new buyers to seek opportunities and UK house price news.
During the financial crisis, the decline in prices of homes had made real estate more affordable, and the central banks were slashing rates to encourage investment in houses, bonds, and equities by quantitative easing.
According to OECD, UK housing is 30% overvalued, and in terms of rents, it is 38% overvalued against rents. The most expensive regions are in the South East and London, which is almost 64% overvalued for first-time buyers (Nationwide data).
Alternatively, the housing in Scotland, Yorkshire, the North East, and the Humber is more affordable, where the rate is closer to Spain.
The reports by a property firm state that the UK's chance of leaving the EU is likely by the end of October, which may present an opportunity for sellers of UK property.
The markets remained stable during the political turmoil and have proved strong. As a result, the annual price is set to pick up on an upward trajectory from June to September, where the firm forecasts the growth in summer by 3.8 per cent compared to last year.
Hometrack report claims there has been growing polarisation in the UK markets across southern England and the rest of the country, where the growth rates in London were low in the last three months, but the prices have been increasing annually.
Liverpool and Cardiff had the highest growth, and Bristol's annual growth rate was the highest in southern England. It is believed in the southern cities, the increase in supply had been compounding the downward pressure, while the demand has been weak; alternatively, the northern cities continue to depict growth as the sales clear the supplies fast, which has been supporting the average price growth.
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