Due to the current economic climate, in recent months, the UK housing market has been in dramatic decline. A staggering 16.6% decline has been seen, to date with a total of 1.3% of that amassed during January 2009.
There are many articles online which give you an idea about the future of the UKs economy. It seems unlikely that any improvement will be seen for some time to come, if anything the condition of the housing market looks set to decline further still.
It has been reported by the RICS, Royal Institute of Chartered Surveyors, that this year we are expected to see a further reduction in the amount of homes being sold, within the United Kingdom. In fact the current housing market is in the worst position seen for about thirty years.
RICS have reported that house prices will plummet a further 10% and sales of homes will not pick up again until 2011, therefore people will have to accept that their homes are now worth less than they were a few years ago if they are going to move on.
The UK housing market has been damaged by the current economic climate therefore a number of houses are being repossessed and resold at a far cheaper rate, therefore it is a very good time to purchase, for first time buyers and people looking to invest in property alike. However, it is not such a good time to sell property within the United Kingdom.
During the rest of 2009 it is expected that a further 34,000 homes will be repossessed. Housing repossession is currently at an all time high, this owing mainly to the current economic climate. People are finding it ever more difficult to keep up with their mortgage and rent repayments.
listed below are some of the main reasons why the UK property market has fallen dramatically over the last year.
(1) Mortgage companies are lending less and less, so people are finding it very difficult to find a mortgage.
(2) In order to obtain a mortgage, finance companies require the buyer to provide a much larger deposit. So for first time buyers, being able to get a mortgage to buy their first home has virtually become impossible.
(3) People are expecting house prices to fall further, they are unwilling to buy.
(4) Although cuts in the banks base rates have helped to reduce how much peoples mortgages cost, this wont actually help to stop the prices of houses falling further. Even with these cuts, the average cost of a mortgage has not altered that much because 2 or 3 years ago people were remortgaging due to great deals being offered. What many of us do not realise is that over time the banks have been increasing their profit margins.
Above we have looked at the reasons why the UK property market looks the way it does. As we watch the market closely, there certainly seems to be no chance of the problems easing for many homeowners in the coming months. But it is not just homeowners who are suffering with this current slump. In recent months there have been many construction workers laid off and many estate agencies closing.
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