According to the news in Reuters, The house prices of Britain are...
According to the news in Reuters, The house prices of Britain are expected to increase this year because there is a lack of supply while the demand is surging high from the foreign investors, who take up the high prices of property market in London. This is proven by the Reuters poll.
Home prices are increasing once more together with the recovery of the economy as well as the interest rate at rock bottom. There was a poll conducted by Reuter in the past week. According to 27 economist and analyst, there will be another increase to 7% this year.
Here is what a London-based independent property market analyst said:
"There will be more buyers, and at this stage the supply has not increased. There will be a lot of people thinking, `I will lock in my mortgage now'."
For those who can afford to get a mortgage, the borrowing costs are reduced because the Bank of England cut the interest rate to a record low 0.5% almost five years ago. It is predicted that the bank rate will continually increase starting next year.
According to Bank policymaker, , the uncertainty over how Britains economy will work in the upcoming months indicates the opportunities that the Bank will move wither earlier or later we're "reasonably well balanced."
Compared with a year earlier, the growing demand continues to increase, asking prices about 6.9% higher in the four weeks to February 8. A property website said last week that this is the fastest pace in more than six years.
The demand continues to rise because of the program made by the government, which lowers the deposit for mortgage. This is known as the Help-to-Buy. Its objective is to make it easier and faster for the first time buyers to have their own house.
This pushed the average asking price for a house to 251,964 pounds, and this is more than nine times than the average British income.
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Without any doubt, the poll revealed that the average price of the house was too costly. It provided a consensus rating of 6.5 if you will base it on a 10-point scale, in which the number 1 rating is undervalued while 10 is the overvalued.
The consensus rating of a house in London, which is on sale with the highest asking price in the country of 90 million pounds is 8.0. The economists even gave the highest rating of 10.
"The housing market in London is without doubt over-cooked, and that itself is largely due to lack of supply."
London is improving
In London, there are optimistic buyers who are coming to see the properties. But in return, they are just disappointed knowing how much house they can have for their money not to mention that there are other buyers who already have a cash in hand.
Even the prices in Tower Hamlets, which is historically one of the poorest boroughs in London, we're increased about 30% last month compared last year. However, in the north of the country, the prices remain the same.
Next year the growth in average British prices is predicted to slow by about 5% and to 4% in 2016. However, the slowdown will be overshadowed by a optimistic market in the capital where the prices are expected to 9.2%this year, 7% next year, and 5% in 2016.
"London house-price growth is completely out of step with the rest of Britain. This dichotomy is likely to continue for the next year or so before expectations return to more sustainable levels."
Since year 2007, the house prices in Britain tripled. But they fell when the financial crisis began.
Because there is a soaring high housing market, Persimmon, who is the Britains largest housebuilder, said last Tuesday that it would move forward a 1.9 billion-pound planned payment to shareholders after reaching a 49% increase full-year pre-tax profit.
There is an increase in demand for new houses since competitors have been increased over the past year due to the governments program of helping homebuyers.
In one year, the the FTSE 350 household goods index, composing of many housebuilders, has increase about 30% as oppose to an increase of just 8% on the FTSE 100.
Last Monday, Bovis said that they have a plan to double the number of houses to sell every year for the next three years.
"The housing market is recovering with higher activity levels and improving house prices.
I'll say that I actually got the idea for this post chatting to Rob from Big Track Outfitters. Thanks for the seed. I suppose you get inspiration in unanticipated ways.
Posted in Real Estate Post Date 10/17/2015