Where is the UK Property Market Moving?

Where is the UK Property Market Moving?

Housing prices are a key issue for many people. With the cost of buying a home outpacing the financial reach of potential first time buyers, both the government and the Bank of England have introduced new funding schemes to help people get onto the property ladder. But with the cost of renting high as well, it seems that overall the UK property market is far too expensive.

In fact, a recent study by the Organisation for Economic Cooperation and Development revealed earlier this year that the UK’s housing market was the 8th most overvalued in the world. The study, which took into account housing prices compared to the average wages and the cost of renting, found that compared to rent, housing prices in Britain were 31% too high, and when compared to incomes were 21% overpriced. The method of measuring house prices against earnings offers a similar way of placing value on things as the method used to value shares and stocks.


Buy-to-let market growing


Landlords are on the receiving end of a large amount of investment from banks, new figures have shown. The buy-to-let market is continuing to go from strength to strength, with the value of loans that have been given to landlords increasing by 31% on the previous year. New Council of Mortgage Lenders (CML) data from earlier in August shows that landlords have received £5.1bn in the second quarter, a rise of 21pc on the period from January to the end of March.

With interest rates expected to stay low following the announcement from Mark Carney, Governor of the Bank of England, it is anticipated that the buy-to-let market will continue to grow. The cost of mortgages for landlords is already low, and still falling, and thanks to low returns on other assets, more savers are looking at property as a good investment.


Fears of a housing bubble


While it is early days in the recovery of the housing market, there are already fears that the current measures and lending situations could lead to another housing bubble in the near future. The government’s Help to Buy scheme is one of the things that is accused of contributing to a potential disaster in the future. However, lenders’ behaviour could also aid the problem, with lenders asking first time buyers for smaller deposits, and many getting rid of minimum income requirements. How the situation will develop is yet to be seen, but it is certain that there is more than a passing need for careful monitoring of the situation.

Buying a home?


If you are buying a home, you want to make sure you know exactly what you are getting. The best way to fully assess the property you are intending to purchase is to get it surveyed by professionals. Allcott Associates are professional Chartered Surveyors and Structural Engineers, who specialise in providing homebuyers with a range of structural and surveying services. Call us today on: 0844 251 2563 for more information.


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