Who is Buying Your Property?
The property market has had a lot of coverage in the news this week. It’s a fact that property prices have been rising at a rapid rate and there is much speculation that they will continue to do so. Analysts are predicting a average yearly price rise of 6% per annum and the surprising figure of a national average house price of £330,000 by 2020 has caused much concern. Fair enough if you are already on the property ladder then this is great news but if you are one of the many who still can’t afford to buy their own house then this news makes life appear to be even harder and more unfair. Why is this happening and who is today’s typical house buyer?
More Overseas Investor’s are Buying Property in Central London
According to a recent article in the daily telegraph only 27% of new London homes were sold to UK property buyers, meaning that the rest are being sold to overseas investors. It appears that in London there are two major factors that keep pushing prices up. Wealthy overseas investors who simply park their money in posh London homes and inherited wealth that simply gets passed down. This doesn’t give your average London worker a fair crack at the whip and many believe that unless you are earning at least 100k then you might as well move out of London. If you are based outside of London and are struggling to sell your home then a company like Direct House Buyer can buy your house at a fair price that is still close to the market value.
Government Help to Buy Scheme Seems to Have Backfired
Another aspect that has fuelled the growth in property transactions is the apparent success of the Government Help to Buy scheme. It does seem fair that for those who don’t have the luxury of the bank of mum and dad that the government are there to give a helping hand. However, with the deposit requirement of just 5% and mortgages becoming far more easily attainable this scheme has certainly helped to provide more buyers then sellers and thus prices are quickly going up. It was announced during march that the help to buy scheme will be extended until 2020, maybe it just a coincidence that analysts predict rapid price growth until then or maybe it is evidence that the help to buy scheme will continue to fuel growth and is technically a double edged sword, whereby it helps buyers now but what about the next generation.
Many People Still Speculate on Another Housing Crash
Before the announcement this week that prices should continue to rise until 2020 many where speculating that another crash is imminent, it now appears that those concerns have gone away but when will the next crash be and if you leave it too long to get on the property ladder are you taking more risk of not only missing out but facing even more of a negative equity risk if and when prices come tumbling down again.
What About Those Who Want to Sell in the Rest of the Country
For the rest of the UK the outlook still looks very bright and according to a recent report by the Halifax 65% of people believe that now is a good time to sell. As well as positive news from the Halifax the royal institute of chartered surveyors believe that as a worst case scenario prices in the north of England will rise by 2% and in Central London this figure will be at least 9%, for Londoners as a whole the regional forecast predicts that by 2020 the average house price will be £567,000. Realistically for any first time buyer to afford this in 2020 they would have to be working for a financial institution or be a very successful entrepreneur, meaning that most first time buyers will be completely priced out of London in just a few years time.