Property Experts Speak Of An Unsustainable Bubble
The UK housing market could be heading for a crash suggests leading property market experts, as 2016 is predicted ‘unsteady’ for all involved.
The UK housing bubble is a very real concern.
We are all aware that UK house prices have been fiercely increasing since the critical fall of the financial crisis during 2007. For buyers and sellers who are consigned to the UK’s property market, this news could be perceived as relatively positive, as a property can be regarded as a serious financial investment. However, the UK housing market is hard to keep track of, and property experts speak of an unsustainable bubble that could be about to burst.
What Does The Future Hold For House Prices?
The UK housing market is under scrutiny. House prices have been souring over the last 18 months, and now house prices have risen above pre-crisis 2007 levels. Whilst present house prices are boosting our economy, there are fears that house prices are spiraling out of control.
Crispin Odey Suggests that there are a series of threats to the housing market, and that 2016 could be a difficult year. Read more here.
The house prices are unsustainable, and property experts suggest it will lead to an inevitable crash, which would leave house prices seriously decreasing.
It is predicted that this crash wouldn’t start to recover until 2019. Read more here.
Investopedia have recently released an article that showcases 6 factors that point to a recession in 2016. Read more here.
Commercial and Residential House Prices Will Drop
The problem bubble is sourced from specific segments within the housing market, which will end up effecting the entire market, both commercial and residential.
The new BTL (buy to let) tax laws, and ever increasing interest rates mean that landlords are being significantly targeted. BTL properties now cost more than ever and do not bring in a decent return. What was once an investment as a means of income is now at a loss, and we could see landlords deciding to sell up, opening up a large percentage of the market producing a negative effect.
Mortgages are still not a viable option. Banks are (once again) tightening their lending hands and whilst house prices continue to rise, matching credit just isn’t available. Where banks may have once agreed to lending, house prices are now significantly high and interest rates continue to increase, paying back the borrowed money is proving difficult for many homeowners, and seemingly banks will not take the risk.
In this sense, the housing market is seeing similar patterns to the 2007 recession and the effect it had on house prices.
The crash concern is real.