The data in a review published by the Centre for Economics and Business Research (CEBR) will get mixed responses from buyers in the UK. The review shows that house prices will be set to fall during the period in 2011, that may come as bad news for property owners looking to built up their equity levels or sell their houses but good news individuals that are thinking about buying a house.
The group predicted that property investment costs might drop by around 1.7 % during the period of 2011, driven by poor employment statistics, increasing living costs, and salary gets frozen. Nevertheless, the CEBR also states that after 2011 the housing market will begin a sluggish by steady recovery. It is believed that the actual areas which are most likely to bestruckby the house prices drops are the ones which are as well very likely to be hit by job cuts arising from the coalition government cutbacks.
Some good news within this is that houses will end up less expensive for novice consumers, who have been having difficulties to have on the property hierarchy for some time. However, even though they may come across that the actual price of property may come down still they have to overcome the obstacles within the mortgage market, meaning getting a good deposit and looking for a creditors who are ready to supply them the bank loan that these people require.
The CEBR stated that a rise in consumer trust in conjunction with more relaxed loans requirements from banks may further support the recovery of the housing market within the coming years. However, for the short term – requirement for the home loans are more likely to stay minimal because of the unstable economy.
Douglas McWilliams, chief executive of the CEBR, said: “We expect house prices to grow tentatively over the coming years, given that household incomes are being squeezed and banks are still wary of lending. There is currently significant uncertainty in the market caused by the government’s spending cuts and a choppy recovery, which has greatly impacted transaction levels.”