Mar
2
02/03/2009
The UK housing market has once again receded to reach the same levels as it stood in February 2006. It is still to be seen if the recent slump in the sales of UK property is just another cycle of recession that goes naturally with any economy or it is a fall that will even dwarf the crash of 1990. According to the recent figures released by the Land Registry, this is a consecutive fifteen month decline where the property value has seen a downward trend to shed almost 50% of its earlier gains, at its peak.
The Facts
The average price of a UK home is now £161,883 and almost all regions of the UK housing market have seen significant drops. Add to the woes the number of sales of houses and the picture looks even grimmer. The HM Revenue & Customs revealed that the sales of houses more than £40,000 decreased to just over 59,000, a stark contrast to the last year when 126,000 homes were sold during the same period.
Pessimists
Experts believe that the UK government is doing its part to overcome the future decline by cutting on the interest rates, suspension of stamp duty on houses less than £175,000 in value and releasing a huge bailout package. Despite such efforts, the UK property sales have yet to register a monthly gain. There are even those experts who are predicting a continuous decline until the mid of 2010. Almost 44% of the homeowners surveyed by the Conservatives say that they fear that they will not be able to pay their mortgage in the coming 12 months.
The Mortgage Lending Council has even stopped issuing a future prediction and potential buyers are not listening to the Nationwide and Halifax pundits. What everyone is waiting for is the actual figure that would suggest a rise in the sales of house or an increase in the current prices. There are approximately 5.7 million people who have become house owners since 2002 and if figures are of any real value then almost 90 percent of the home owners would have already gone in negative equity.
Optimists
Even in these challenging times, there are many experts who believe that it is just a matter of time before the UK housing market sees an increase in the number of housing sold. They point out to a very logical fact; the recession of the early 90’s that eventually turned to become one of the most lucrative decade in the housing industry. All is not lost for the home owners, a few of which are glad to pay the reduced variable interest rates. Similarly, there are many house owners who had borrowed their properties at a long term fixed interest rates. They are happy to pay their mortgages and wait for a turnaround to sell the properties at a reasonable price.
Experts believe that the lack of first time buyers and stiff mortgage regulations are the primary factors to blame for the decline in the UK property sales. What does the future holds is anyone’s guess but there are still a large proportion of experts and consumers who are optimistic about an impending turnaround. And this is what really counts….