Housing market muddles
‘Biggest drop in house prices for 12 years points to cooling market’
The housing market is splattered all across UK newspapers at the moment. So what’s the story? As a tenant who isn’t even dreaming of buying a house for a long time, I’m curious about the forecasts.
Bursting the bubble
HSBC said this week that house prices in Britain are overvalued by about 30%. The average house price in the UK is currently £184,099. Many are looking forward to the bubble bursting, which should mean that in three years time, housing might be much more affordable.
Mortgage issues
One area of concern is the mortgage market. The Council of Mortgage Lenders says that 1.4 million British borrowers are expected to come off low fixed-rate deals and face higher payments in the course of 2008. If you’re already struggling to pay your mortgage, this could cause some problems over the next year or so. If you’re trying to buy a house at the moment, getting a mortgage in the first place could be an issue. Figures published this week by the Bank of England showed just 88,000 mortgages were approved for house purchases in October, the lowest number in almost three years.
So, the housing market is in flux. Overall, it’s not so much a crash, as a slow downhill crawl. I’ll be renting for a few years yet – having recently started working life, I’ve not even started saving for such a massive purchase.
The Indian way
It’s interesting to note that on a global scale, the country with the most homeowners is India. They tend to buy one room, then build extra stories as and when they have the income to do so. This is a very different approach to home owning than in the UK, where we tend to ‘buy’ our own home and enjoy the status of a ‘homeowner’ whilst spending a big portion of our lives struggling to pay off the mortgage!
Written by Becky Williams.
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