The UK real estate market is very vibrant no doubt, and with near accurate data being churned out by different bodies monthly, I can hardly put down my pen – or get my hands off the keyboard before something big occurs. News just reaching me says “tenant demand for privately rented property hit a two-year high during the fourth quarter of 2010.” Sounds nice, doesn’t it?
OK. So what does this have to do with anything? As an expert in the UK real estate market, my immediate interpretation is very simple: there is something stopping the potential home buyer from buying, instead he rents. The former news may seem great for landlords, but juxtaposing that with my simple analysis shows that the development is not good for the economy at large.
Consumer concerns over the economy, job security and possible interest rate rises are several of many factors that have ensured that the market remains broadly flat, despite historically low stock levels. New home prices continue to fluctuate monthly around the £215,000 mark indicating large scale uncertainty as to the direction of the market – and economy.
This is certainly not good enough because consumer confidence is central to the forward movement – or otherwise of any economy; and now that it has also hit the real estate market, no one can tell what would happen next. The prospect of an increased mortgage debt and the imminent rise in interest rates are critical factors making new home buyers play the “watch and see” game.
Although there seem to be some steps being taken by developers and mortgage institutions, how fast this is addressed will greatly influence consumer confidence.
