I think there are few things that are going to fundamentally shape the London and UK market over the the next few years. One is mortgage regulation and interest rates. However, this does cap the amount people who can borrow compared to their income, and that keeps deposits high for first time buyers and for home movers. In London, the gap between salaries and house prices is probably biggest, since there was a 500% increase of home prices in the last 20 years, and people have begun to reach the limit of what the size of mortgage they can get, limiting their ability to buy. Another reason is mix of sluggish economic data, Brexit uncertainty, and bubbled prices. Ah, we’re never too far away from Brexit are we? But the huge uncertainty around what sort of Brexit the residents going to get, and how badly it’s going to affect them economically has meant that people have been kept back to move house or take a risk. The Brexit vote was the tipping point that slowed price growth in my opinion. If you hadn’t noticed, London has some outrageously expensive houses. However, I as a house owner, personally am in favor of lower housing prices since it allows me to pay less property taxes.
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