UK Property Market

It’s been a sweet market for homeowners sitting on property that has been slowly rising in value but it’s come to an abrupt end.  The HSBC has now stated that UK house prices are almost 30% over-valued.  This "devaluaton" isn’t good news for anyone who has recently bought a home to live in, especially as house prices are likely to continue their downward trend in the coming months and so new homeowners are going to find themselves with zero equity and probably owing more than their house is worth until the trend turns and prices begin to climb once again.  It is however slightly better news than the IMF’s recent statement that the UK property overvaluation was more in the region of 40%!

Anyone who is thinking about selling their home needs to do it now because things are likely to get worse if they wait.  Those who have high mortgages and so risk even higher repayments resulting in foreclosures need to assess their housing situation now whilst the forecast is bleak but the market hasn’t really started to feel the impact.  Once this trend starts to really grip the property market and the UK enters a property recession, then it’s going to take longer to get a good price, and the chances of foreclosure due to non-payment of mortgage will be greater.

The sellers have had the market faced in their direction for a number of years now, with many people selling their homes for a huge profit.  Despite the housing shortage, especially for lower priced homes, there is now going to be a buyer’s market with first time buyers being the optimum choice for a seller. First time buyers may be facing tighter financial boundaries because of interest rates affecting mortgage repayment schedules, they won’t be stuck in a property chain.  The downside is that they are also going to have a larger amount of homes to choose from and will be able to buy the home from the seller who can offer them the best deal.  Any seller who has no equity in their home, and needs to sell, is going to find themselves in a very difficult situation where they have to sell the property, but have no financial negotiating power to attract a buyer who is going to be only too aware of the fact the property is overpriced.

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