UK Property Market: Current Scenario
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After the world declared itself in depression, the UK economy also saw a massive impact on its property market prices. The inflation levels rose in UK thus affecting the pockets of consumers in the country, while the property market plummeted by almost 6% which was considered the biggest decrease in last two decades.
The gloom has already set in the property market and all homeowners can do now is wait for the next boom to arrive in the market. The main reason for the fall in property market prices is that interest rates have gone up and people are finding the prospective market for properties in other parts of Europe more favourable at the moment. Even mortgage costs have risen drastically and this has badly affected consumer confidence in the UK. Moreover, household bills and the rising cost of living coupled with the upsurge in the prices of the commodities have also affected the sale of properties.
This situation has been worst felt by those homeowners who find they are looking at negative equity. Tight lending regulations in force now are also having an adverse affect on the once booming housing market.
Property sales are always considered as a key signal to the economic stability and faith in the economic system of the country. It gives the homeowners and the government the assurance that they have valuables in their possession which are in the form of land and property but due to the falling prices of property and increasing inflation, doubt has been cast in the minds of the public. They are obviously worried about their finances and daily budgetary needs and so consequently growth and economic progress also decline with the fall in house prices.
Even the labour market is unstable with rising unemployment and can be directly attributed to the downturn in the property market. Some analysts and economists consider recent property prices in the UK to have been overvalued due to the boom in the world economy. But as world recession kicks in, the prices are actually dropping back to what is considered their normal prices.
The property market is expected to fall by 30% in 2009 with the outlook for 2010 even gloomier before an expected recovery in 2011 or 2012. It looks like homeowners in particular and the general public will have to endure another couple of years of hardship before things take a turn for the better. In conclusion, it may be better looking for homes for rent than to take the risk of buying into the volatile housing market.
Posted on: Wednesday, July 23, 2008 at 5:12 pm 
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