The State of Property Prices in the UK

The UK property market is not exactly in the best of shape. Property prices in the UK have dropped significantly over the past few months, and the market is quite troubled. There are those who point to the US sub prime crisis as a factor in the dropping of property prices in the UK. While the crisis may have affected the UK property market, there are also other factors that have triggered the dropping of property prices in the UK.

The decrease in the mortgage financing which is brought about by the worldwide financial crisis is definitely affecting the prices of properties in the UK. Add to this the pressure on the income of house sellers, and there’s little wonder why prices of houses in the UK are dropping at an alarming rate.

Buyers however remain cautious in buying properties despite the fact that prices have decreased tremendously. The demand focuses more on apartments that are competitively priced yet very well designed. Apartments that are priced above market averages are obviously hard to sell these days. Aside from the prices, what makes these apartments even less attractive to house buyers is the high cost of maintenance fees that can add up another 20% to the total cost of mortgage needed in buying these types of properties.

Buyers of course are waiting for prices to drop even further to make a move. The fact that a house they are interested in, could be worth even less in the next few weeks means buyers could play the waiting game.

Since the financial markets worldwide have affected banks and their policies regarding providing home mortgages, there are not enough financing for house buyers. Banks are now tightening their belts and are no longer lending as they were before the crisis hit. This means that fewer house buyers are getting access to home mortgages, which translates to fewer house sale transactions.

However, there are certain regions in the UK where the crash of property prices have not really affected the market, at least yet. In Scotland, for instance, prices of property have increased significantly. Many experts are saying that Scotland has the most active real estate market in all of the UK.

Homeowners on the other hand are trying to get the best possible value from their properties. This is evidenced by the rise in re mortgages this year, up by at least 40% from the previous year.

While most of them prefer to wait for prices to drop even further, house buyers are advised to look for great bargains in the market. There’s really no assurance if the prices will continue to hit record lows, thus, house buyers should take advantage of the situation. As long as one knows where to look for the best priced properties and how to make a hard bargain, one can get the best deal in the real estate market. The build up of real estate properties left unsold makes it even more likely for buyers to barter for lower asking prices. Most of the time, buyers eventually get the price they demand.

So how will the real estate market in the UK fare in the next couple of months? There’s really no way of saying how things will transpire. For the meantime, house sellers, buyers and everyone involved in the real estate market are keeping their fingers crossed that the market returns to its healthy state.



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