Home owners won’t be able to sell their house quickly for another year
Reuters Poll predicts property prices will remain flat
A poll carried out by popular agency Reuters believes that property prices will remain flat until 2014. They have largely blamed the double dip recession that we are now experiencing which has caused further widespread unemployment. They also predict that the banks will continue to limit their lending facilities meaning that many would be home buyers will struggle to get a mortgage.
Quick house sale needed as prices may fall further
They have stated that unemployment is currently at eight percent which is close to a seventeen year high. With further threats from Europe and recent austerity cuts in Greece the negative sentiment alone will hold the lenders back. Interestingly the Reuters poll which surveyed twenty five market professionals showed that fourteen experts predict that UK prices will fall further. However, this prediction does not include London whereby prices have already risen fast by three percent this year and are predicted to rise a further two percent in 2013.
Incomes are still out of sync with property prices
At You Sell Quick we have previously discussed the income housing gap and interestingly Reuters have also pointed this out. The average house price currently stands at £164,000 which is six times greater than the average salary of £26,000. Seeing that most lenders will currently allow you to borrow four times your earnings then unless you can combine your wage with a partners you won’t be able to get a mortgage. Because of this an ever increasing amount of the population are being forced to rent which once again causes another problem as rental prices are rapidly increasing. For the average UK citizen who is not on the property ladder the options are starting to run out.
Interest rate to remain unchanged
For those who do currently own a property or at least can attain finance, the good news is that interest rates aren’t predicted to rise until at least the summer of 2014. Low interest rates have certainly helped existing home owners but for those who don’t own house, mortgage availability is still at around half the levels that we experienced at the peak of the market.
Government Schemes have not helped
The government did try to help first time buyers when they announced over a year ago that they will assist first time buyers who have a small deposit. What is in place is a system whereby a first time buyer only has to put down a five percent deposit and the government will contribute the further ten or fifteen percent. In return the government own a equity share in your house, meaning that they will also profit once your home is sold again in the future. Unfortunately new figures show that lending to first time buyers is down Seven percent since this time last year. It’s not to say that the government’s scheme is in any way to blame but it certainly appears that it hasn’t experienced the success that was hoped. Either the existing cracks need to be repaired or the government should go back to the drawing board all together.
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