Following the recent decision of the US central bank, the Federal Reserve to increase interest rates for the first time in a decade, the Bank of England finally decided to the same early this year. Already in England and Wales, this has led to a in stamp duty rates for people looking to buy a home that is not going to be used as their main residence. This has also opened the door for Scotland to follow suit.
To this end, buy-to-let landlords, as well as second-home buyers are finding things more expensive while some potential buyers are being deterred altogether. So more than the perennial issue of whether house prices will go up or down, the UK property market is unarguably having more on its plate right now.
No doubt, the property market is already receiving some jolts, just after a few years, the mortgage system has been reactivated and sales have been boosted. No one would have thought that a Conservative government would be relatively myopic of buy-to-let landlords who are supposed to be ardent Tory voters.
At the moment, the UK property market is experiencing the fastest ever recorded time acquired to sell a house. Even as asking prices climb to a record high, the UK property market has dismissed all uncertainties surrounding the EU referendum.
Due to the electoral uncertainty, there has been a contrast to the run-up` to the general election as against the asking prices of 0.1pc experienced in May last year. According to the reports obtained from the online property portal in May, there has been an increase of about 0.8pc in asking prices thereby making the average £310,471.
Dropping about 0.2pc, the only area in Wales and England to establish a decline in asking prices each month is Greater London. Since 2010, the UK property market has not recorded a low selling time as it is today. It is reported that the time to sell is currently on an average of 57 days which is as a result of a terrible lack of supply in the market. When compared to this same period last year, there are now only a handful of 5.3pc new-to-market properties in the market.
Before the hiking of stamp duty by 3pc, the surge of investors making purchases on properties in the first three months of the year also worsened the shortage. In fact, the usual reluctance of buyers to make major financial decisions in times of political uncertainty has so far been overcome by the over-riding factor of supply outstripping demand.
Indeed, the recent figures for average time to sell reflect how properties are being snapped up without delay as many seem to be getting on with the certainties that are within their control by snapping up every suitable property they can find more quickly than ever.
Since asking prices can be distorted by agents mispricing properties, they are an unreliable barometer of the property market. The east and south-east of England are the areas currently experiencing the highest annual rate of growth in property prices. Wales and the south-west of England outpaced London’s average price growth of 4.8pc.
According to a recent data released by the Office for National Statistics, UK properties are now more costly than they were before the 2008 financial crises with about 23% increase. However, the cost of London properties are far from normal as they are generally known to be incredibly expensive which are roughly 60% above their previous peak, this presents a huge disparity between it and the rest of the UK. Currently, there are no signs of ending the London property boom which is already unprecedented.
While the average cost of house properties in the UK is at £292,000, London homes now cost £552,000 on average. Unarguably, national statistics is distorted by London’s performance. If London’s booming market is taken out of the analysis, you will discover that the average UK house property which is only 14% higher than its peak will be left at £552,000 on average.
Notwithstanding, a short-term period of falling house prices has been forecasted by a poll conducted by the Royal Institution of Chartered Surveyors due to uncertainty surrounding the WU referendum.
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