The UK property is not out of business

The year 2009 was excellent for buyers able to move liquidity. The number of potential buyers has greatly limited because financial institutions have rediscovered the virtues of caution: the supply of loans has been reduced by two thirds compared to its level before the credit crisis. The sellers have preferred to wait and not to lower their claims, while unemployment rose slightly below expectations. It is therefore quite logical that prices have increased and the volume of transactions has remained limited.

Difficulty borrowing

It seems that the situation evolves. In recent months, buyers have discrete facts frankly, while sellers have instead raised their prices. However, the difficulty to borrow is always greater. If the monthly number of mortgages granted has now reached double its low of 27 424, it is still well below what we knew before the crisis.

Except that the UK economy suddenly revived in 2010, banks do not risk paying too much the amount of the acquisition to borrowers whose monthly payments are too high in relation to their income. Credit institutions are still left too much credit for defects afford. This policy will crowd out the market first-time buyers. As long as unemployment is set loose incidents repayment will increase. The direction of price increase will be hindered or even completely reversed.

However, economic recovery alone would perhaps not in itself restore the situation. If you want to keep inflation in check, it will raise interest rates, thus increasing the burden on borrowers and those who invest in rental housing. So far, the rates of 0.5% they had avoided asphyxia. Any increase in push a number to sell.

The wealthy foreign buyers, who do not need to resort to borrowing, could save the London market. In fact, according to the valuer Savills, the price of high quality assets located in the center grew by over 7% since March, even if he had unscrewed from 23% just before, between 2007 and that month March.

However, this population of buyers will not continue to bear market if London remains an attractive city for rich people. However, according to Savills, this does not seem clear: the United Kingdom should not rely on its capital to exit the housing slump when it is immersed.