The 2011 UK Housing Market
While mortgage lending fell in December 2010 by 6% buying a house looks set to become more difficult. With the country having such low interest rates buying a house should be high on a person's priority list but in reality it appears to becoming more and more unavailable to the average person. The cost of living is rising at a scary rate in the UK, with VAT at 20% and fuel prices climbing at a ridiculous rate the average person is just getting more and more out of pocket. This must leave many people praying for a decent pay rise in April.
As the cost of living gets higher, banks appear to be ever more critical of people's finances during their mortgage applications. This is not necessarily just the case for new buyers. As people's families grow bigger properties are needed but the increase of mortgage is nowhere near as straight forward as it used to be in better financial times. The good thing in some ways, is that the banks are being cautious, maybe overly so but caution in some capacity is good. The worst case scenario for many buyers in this current climate is if they buy a house just within their budget at the moment. There is pressure on the bank of England to raise interest rates by the end of the year. This can vastly affect the amount people pay each month and sometimes be the difference between affordable and not. The last thing any house buyer in 2011 wants is to end up in negative equity.
So who is benefiting from the current housing climate? In my local area the people that really do seem to be able to take advantage of the 2011 housing market, are the ones that have disposable income and don't need credit. Housing is quickly becoming a commodity in many areas resulting in many people buying to rent. Many people are quite desperate to sell their house, and while waiting for a sale many people's lives have to go on hold until everything is sorted. Potential landlords are capitalising on these situations in the 2011 market by offering the money below asking price knowing many people are desperate enough to take the offer. This double edge sword is probably helping to keep the housing market as active as it is, but in the long term making home owning achievable for far less people.
So what does 2011 have in store for the house buyer or seller? I think the only certainty is the fact that there won't be any. Without being a naysayer I think many people will be a bit more frugal and wait for a better financial climate. The only likely hood in 2011 is that maybe many more people will buy that lottery ticket in the hope of affording a house.
As the cost of living gets higher, banks appear to be ever more critical of people's finances during their mortgage applications. This is not necessarily just the case for new buyers. As people's families grow bigger properties are needed but the increase of mortgage is nowhere near as straight forward as it used to be in better financial times. The good thing in some ways, is that the banks are being cautious, maybe overly so but caution in some capacity is good. The worst case scenario for many buyers in this current climate is if they buy a house just within their budget at the moment. There is pressure on the bank of England to raise interest rates by the end of the year. This can vastly affect the amount people pay each month and sometimes be the difference between affordable and not. The last thing any house buyer in 2011 wants is to end up in negative equity.
So who is benefiting from the current housing climate? In my local area the people that really do seem to be able to take advantage of the 2011 housing market, are the ones that have disposable income and don't need credit. Housing is quickly becoming a commodity in many areas resulting in many people buying to rent. Many people are quite desperate to sell their house, and while waiting for a sale many people's lives have to go on hold until everything is sorted. Potential landlords are capitalising on these situations in the 2011 market by offering the money below asking price knowing many people are desperate enough to take the offer. This double edge sword is probably helping to keep the housing market as active as it is, but in the long term making home owning achievable for far less people.
So what does 2011 have in store for the house buyer or seller? I think the only certainty is the fact that there won't be any. Without being a naysayer I think many people will be a bit more frugal and wait for a better financial climate. The only likely hood in 2011 is that maybe many more people will buy that lottery ticket in the hope of affording a house.
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