Funny isn’t it surely not a day goes by when commentators wade in with speculation regarding the housing market. Some saying up, some down and some the same but who’s got it right?
Right now for sure we’re in a period of calm. Prices have levelled off and in some areas fallen slightly. This was inevitable given the vast increases seen over the past 10 years or so. That level of growth couldn’t be sustained because at the lower end of the market buyers are unable to purchase a first home. Whilst this remains the case, expect only a small growth in prices.
To understand the market you have to look at a variety of factors from the past few years, and understand the mind set of home buyers.
The big increases continued whilst interest rates were very low. Borrowers were able to take out bigger loans and investors turned to property because it was possible to get a better return on their money in the buy to let market. Agian as interest rates have increased together with prices the buy to let market now looks alot less attractive.
In the UK we have a obsession with home ownership and it seems if the last 10 years or so are anything to go by that we’re prepared to buy whatever the price. At times it has felt like the week before Christmas. A turkey must be purchased for December 25th however much it will cost! Value for money seems to have nothing whatsoever to do with it.
In fairness there have always been property hotspots, areas seen as so desirable to live that buyers are prepared to pay a premium to live there and that’s never going to change.
Some experts have been saying that UK property has been overvalued for at least 4 years. In truth they’re probably right but it didn’t stop the market values increasing substantially.
Despite the current difficulties in the US mortgage market we remain confident that we won’t be seeing such widespread difficulties here and that there will be a period of calm in the housing market.
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