After reading a few different articles regarding the state of the UK property market and realising we have not done a UK property article in a while, I thought I would share my view on the outlook for the UK property market for 2011.
The end of 2010 was an interesting time for the property market, with not a lot of people looking to move just before Christmas and the extreme weather conditions putting a further dampener on house sales. However, mortgage approvals and sales are still holding up and I would expect as we go into spring, house sales will increase and prices will follow suit.
With news today that the Consumer Price Index has risen to 3.7% the BOE may well decide to increase interest rates in the coming months to try and curb this. However, the recent Consumer Price Index will not be taking into account the increase in Vat which has just come into play. I feel that consumers will have purchased their products earlier due to the Vat increase and this would of course bolster the CPI albeit temporarily.
It seems that in the face of fiscal restriction increasing the interest rate to try and slow inflation could be a dangerous move by the BOE however is it something they have to do? I am unsure as to the strength of the economy coming out of this recession and feel that an increase in interest rates too early could cause another fall in house prices. But then again, does the economy need this in the long run? What we need to remember when looking at the property market is that, unless we have new consumers entering the market, then it could fall into stagnation and at the moment, it is still hard for a first time buyer to get on that first rung of the ladder.
First time buyers are the lifeline of the market they need to be buying to keep the market moving. But then again, say first time buyers have to turn to renting does this mean that the market will be bolstered by Investors for the time being until there are some more attractive lending options available for the first time buyer?
What do you think?
I know one thing’s for certain, by buying one of our UK property investments with built in equity and reliable tenants in good locations you will be either weathering a storm or riding a wave of success.Back to news