House Prices to Remain Unchanged until 2013
House prices predicted to remain flat or even decline
A recent poll by the popular news agency Reuters shows a belief that house prices will stay flat for the rest of the year. At the same time the office of national statistics have produced results that show house prices may even fall by 1.2% during the remainder of this year. Clearly both these results are bearish and house sellers will be dissapointed to see that there is little growth predicted in the property market. The main two factors to blame are ultra tight lending criteria and weak demand from buyers, however it is fair to say that restrictive lending and high deposit requirements is probably the main cause of weak demand from buyers. As we have mentioned many times before it is the banks who are to blame for the property bubble bursting and they are also responsible for holding back he market as well.
Why is the property market in the US doing well?
It does seem that the government are encouraging the banks to take a cautious approach and this is largely due to the threat of the European union collapsing. It’s a shame that we can’t take the same approach as United States, they have aimed for an aggressive strategy in boosting growth. Money that they have given to their banks has been put to good use and the US has now gone from the extreme of not lending at all at one point during the financial crisis to now freely lend again which in turn has allowed house prices to slightly improve and experience growth.
London bucks the trend
Back here in the UK the majority of the country is still struggling to sell. The one exception to this is London. London house prices have remained very solid during the recession not only this but they are now higher on average than the highest level that was reached at the peek of the market. For any house buyer, London property seems to be a great investment and tells a different story than the rest of the UK. Across England prices on average have risen around 1.5% over the last 12 months. In London this figure is far higher and stands at around a 5% rise since the same time last year. Infact London seems to be bucking the trend so much that the average house price is around £140,000 higher than the average home in the north.
North and South Property divide
It has been evident for many years that houses are far cheaper up north when compared to the south. More solid data from the office of national statistics shows that both Wales and Scotland have declined the most, however this is just by a couple of percent. The real falls have continued to happen in Northern Ireland were house prices have fallen by almost 8% in the past year. This is largely due to the over inflated prices that were experienced during the property boom.
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