Will U.K Property Prices Keep Going Up?

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Here in the U.K we are obsessed with our homes and property prices, home prices in the U.K seem to be on a never ending up trend and through schemes like help to buy the government seems dead set on encouraging it.

Increasing property prices are good news to home owners and the U. K’s consumer driven economy but they might not help future generations or anyone that is renting right now. Someone considering getting on the property ladder at the moment might be wondering if U.K property prices will continue to rise or if they should wait to buy. If they already own somewhere the will be wondering if they should move, potential property buyers may consider house prices unsustainable and due for a correction. Some homeowners might even sell up and rent anticipating a large price correction.

In this post we will look at the case for and against rising property prices, none of this post should be considered financial advice because it’s not and I am in now way a financial advisor.

Supply and Demand

The basic laws of supply and demand govern the prices of virtually everything, when there is restricted supply and strong demand prices rise, when there is over supply and low demand prices fall. Home ownership is popular in the U.K, it is much more popular in the U.K than it is in other European countries. Apparently this home ownership trend is to do with the U.K being an island that hasn’t been invaded in hundreds of years, if you live in a country at risk of invasion you are apparently more likely to rent than buy. The U.K has a growing population that puts increasing demand on housing stock, new home building is not currently keeping up with demand.

Interest Rates

Interest rates play a big role in the housing market they are currently very low, the bank of England base rate is currently just 0.5%, it’s lowest ever. Low interest rates make borrowing cheap, cheap borrowing increases the amount people can afford to borrow and obviously reduces the amount of interest they have to pay. The Bank of England has been threatening interest rates may rise for quite a while but many experts say they can’t, the U.K economy is still very unstable and an increase in interest rates could destabilise it even more. One Bank of England board member was actually talking about negative interest rates very recently, negative rates could actually see your bank paying you to take a mortgage.

Incomes

When people earn more it means they can borrow more and buy bigger homes, this increases prices all the way up the property chain. If you are already a home owner increasing the value of your current home is another way of ensuring you have more to spend on your next property, this blog post gives ten very useful tips current home owners can use to increase their property’s value.

According to the ONS average wages are still about ten percent below their 2008 peak. Increasing wages could have a positive effect on home prices, decreasing wages will likely be negative. For many U.K residents the cost of living is fairly high compared to their income.

So will U.K property prices keep rising, what do you think? If I was looking to purchase a property right now I personally wouldn’t wait, let us know what you would do in the comments.

Shared by http://www.homeadviceguide.com/

A post by Mark (7 Posts)

Mark is author at LeraBlog. The author's views are entirely his/her own and may not reflect the views and opinions of LeraBlog staff.
Mark Stubbles is an online marketer, freelance blogger and SEO with nearly 10 years online marketing experience. In my free time I enjoy mountain biking and fishing.

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