UK property prices edge higher as rental predicted to boom in 2011 and 2012, reports Expatfindaproperty.com
· UK property market rises 0.2% in February
· London continues to lead housing market with 2.4% annual growth
· 59% of rental agents expect demand for rental properties to outstrip supply
Data released by the UK Land Registry for February paints a mixed picture of house prices in the UK, according to expatriate mortgage specialists, Offshoreonline.org. Average prices across the UK rose by 0.2% during the month, whilst the same data showed London prices rising by 1.6%, giving London an annual growth figure of 2.4%. Meanwhile in Wales, prices fell by 4.2% in the month, giving an annual drop of over 6%.
Within the London area, some boroughs have recorded huge gains over the past 12 months, with Kingston rising by 8% and Islington by over 9%. However, overall, domestic demand has remained muted, with only London, the South West and South East showing gains of over 0.5%, as UK buyers remain cautious ahead of the huge public sector cuts announced by the government. The impact of these cuts on the housing market remains largely unknown, with many commentators expecting flat or shrinking domestic demand for new mortgages.
At the same time, a recent survey of Association of Residential Letting Agents (ARLA) suggested that 59% expected the rental market to boom in 2011 and 2012, as demand outstrips supply. ARLA members put much of the shortage of supply down to continuing difficulties buyers are experiencing finding mortgages.
Meanwhile expatriates trying to buy property n the UK are now able to access variable rate mortgages with interest rates starting at less than 3.00%, according to brokers Offshoreonline.org.
Commenting on the latest Land Registry and ARLA data, Erica Evans of expatriate property search agents Expatfindaproperty.com said, “The gradual firming of house prices, especially in London and the South East is attracting the attention of expatriate buyers. We are starting to see an increase in interest from abroad, as foreign buyers who are not subject to the same economic pressures as those in the UK sense a buyers’ market returning. UK homeowners are certainly feeling under pressure, with job losses starting to mount and uncertainty creeping into the UK economy. This lack of domestic confidence is sure to dampen house prices, giving overseas buyers a huge advantage.”
Tim Harvey, managing director of expatriate mortgage brokers Offshoreonline.org agreed that demand from overseas is staring to creep up. “We have seen an increase in enquiries from buyers based in Hong Kong, Singapore and Dubai, where local economic conditions do not appear to affecting incomes and savings. Buyers are having no problems finding a 30% deposit and they are certainly ready to take advantage of the low mortgage rates, while these remain. Indeed, many are quite prepared for UK Base Rate to rise this year and seem apparently to view this as a buying opportunity.”
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