North-South divide in property market widens .
The property-market divide between London and the North of Britain is widening swiftly, with sales outside the capital now taking up to twice as long as those inside it.
Richard Donnell, Hometrack’s research director, claimed : “This is only one indicator of a continuing North-South divide.
While properties in London are on sale for an average of six weeks before coming “under offer”, in Yorkshire and Humberside it takes 11.9 weeks, with a corresponding delay in Wales and the North-west, according to the newest survey for the Hometrack website. Since the beginning of the year, the momentum for price rises has emanated from London, while the overall trend has been downward across all the other regions.”
Analysis of sale prices reveals further differences across the country. While price modifications in London have stayed positive in every one of the past half a year, in all other regions prices have fallen or remained static.
“The reality is that, against a background of thin volumes, price increases in London continue to put a gloss on overall market conditions, limiting the real scale of house-price falls across the rest of Britain,” Mr Donnell asserted. Average prices softened by 0.1 per cent in August, following similar falls over the prior a quarter.
But many key signals in the survey show an improvement on the position from last year, despite the downbeat financial and economic situation. Demand for housing has really continued to grow gradually since March, by Fourteen %, compared to a decline of 18 % in the last half a year of 2010.
Mr Donnell warned that the outlook for the housing market was dark. “There are signs that the balance between supply and demand is beginning to movement in direction,” he announced.
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Owing to the aftermath of the world economic downturn, it’s been discovered that repossession numbers have risen and property costs have modified noticeably. This is leading many home buyers to keep away from making a property investment. Because they are thinking twice before making an investment in property market ; the property sector has experienced dramatic lows in the recession.
During this economic phase, it’s critical that you use caution about the investments you make because there has been an inadequacy in liquidity in the market. Amidst this, the house buyers are thinking about putting their money in investments which may give them some profit margins instead of suffer losses.
Defaulting tenants beware
There has been a rise in the number of landlord actions lately. This has been aroused by the fact that there is financial instability in the market and the soaring prices, unemployment and high cost of living are leaving the tenants in a spot of bother. The cases of several renter arrears have been up by 13 percent and now the landlords are feeling the heat and it is see that they are taking action against situations which might have been tolerated earlier.
The persons who are at the receiving end are the tenants. The rising criteria and high deposits have left many of the renters in a spot of bother and to add to that situation the landlords have become much less lenient. The reason behind this is that they know that there are huge number of renters who would be willing to pay the deposits and the rent. This has lead to an exponential increase in the rents cause a financial instability in the market.
The rise in the number of court orders has been aggravated by the amateur landlords who would rush in order to avoid void periods in rental income. More often than not they would overlook the necessity of thorough reference procedures and in the end would have to retaliate to difficult methods. Most of the situation can be blamed directly to the dissolving market as most of the landlord action has been initiated by the fact that they don’t want themselves to be behind the mortgage payments.
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Tenant demand on the rise
There is an upheaval in the number of people looking for rental services. The number of people looking to rent rooms is far more than the number of rooms that are available for rent. The number of potential renters for each rent room has increased from 3 to 4.1 as quoted by easyroommate.co.uk one of the leading sites that provide rental service in UK.
The situation has been created by the property crisis which has left many people out of the property market and thus they are left with no options but to rent homes. Last year the number of rooms to rent has increased at an average rate of 17 percent but there has been a substantial 58 percent increase in the number of people looking to rent.
The Director of easyroommate.co.uk comments that the rental demands have been high like never before in the year 2011. In the more popular cities the houses are being rented in hours after being advertised. As the rental prices are rocketing sky high people have found sharing rooms to be a way out. Homeowners are making some big bucks that are about 6250 pounds a year which is definitely sizeable.
The demand has especially risen in the large cities where the young professionals have been pouring in looking for jobs. Most of the students also look to rent on share basis to counter the soaring education cost. Thus cities like London and other eastern cities have high demands as far as the rent is concerned as the economy in these places is still booming unlike rest of the UK.
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Property market heading towards ice age
The housing market is entering into an Ice age and the persons who bought their houses in the year 2006 to 2008 are touted to be the biggest losers. The experts also feel that there is very little chance for the situation to become normal and it would take at least ten years more for the house prices to shoot up. The pricewaterhouse coopers have reported that the house prices would be low even in 2020 when we take the inflation into consideration. Some experts have even claimed that there is 50 percent chance that the house prices in 2020 would be lower than that of 2007. The housing crisis has been bought upon by numerous causes and some of them are listed here:
- Mortgage has become difficult to get. With shrinking prices the value of the property has decreased drastically.
- Pay scales have become low. This has lead to the downfall of the housing market.
The property scene looks very bleak in the future. Many buyers would be in a state of negative equity as they took massive loans to buy their home and now the value of the place is lea than the size of the loan they took. People who want to move to from different places to London would also be the losers. The reason for the situation is that the prices continue to rise in London as compared to other places. Thus staying in the city has definitely become dearer and out of the reach of many.