The property market in the UK has gone through a difficult period in the last few years. The Government has taken some positive measures in order to help boost the economy and stimulate the property market in particular, with the introduction of Funding for Lending and Help to Buy (I) Schemes. It seems that these measures managed to have a positive effect on the property market, which now is well on the road to recovery, showing clear signs of considerable growth in the upcoming years. London has benefited immensely by foreign investors who bought a large number of properties (approximately 1 billion per quarter) showing their trust in the London market, thus pushing prices up amidst the middle of the crisis.
The Bank of England has indicated that interest rates will remain at 0.5% for a period of time- until unemployment level falls below 7% (it currently stands at 7.8%). Economists believe this may take up to Q3 of 2016, which is a clear sign of the mini boom that the market will enjoy for at least the next 3 years. The Bank of England has indicated that the economy seems to be doing better now and the growth forecast is 1.4% for 2013 and is expected to be 2.5%.
These are positive prospects and if one takes into account the positive retail index of Q2 together with the 28% increase in mortgage approvals, as well as the increase in property prices for seven consecutive months will be easy to understand where the property market is heading.
The introduction of the Government’s Help to Buy Scheme (II) in Jan 2014 will boost demand for properties up to £600,000 and this coupled up with the shortage of properties in the UK (230,000 properties are needed per year but last year only 95,000 were built) will create an imbalance in supply and demand, which I suspect will result in an increase in
London property prices by about 50% for the next three years.
The supply and demand imbalance coupled with the growth of the economy and the measures the Government has taken to assist first time buyers will mean a 3 year boost of the property market and a very healthy recovery of the construction industry.
Leading Property Expert