News / General

HOUSE PRICES - RISING OR FALLING?

By SLAS Spokesperson

When your client, taking your advice, has just concluded missives for the purchase of a penthouse new build at the price of ?500,000 plus and now seeks to find, in the market, the wherewithal to fund that purchase via the traditional townhouse purchased thirty years previously for about 5% of what he now requires to fund his new purchase, one is less than delighted to read the newspaper headline "UK house prices are overvalued". There is always the nightmare that one's client was the last to purchase a property for ??m before the market took a tumble leaving him high and dry to the extent of a six figure sum. However, the Organisation for Economic Co-operation and Development issued a warning on 29th November 2005 in a new analysis of the world housing boom. This warning portended a protracted period of large house price falls, having identified an unusual aspect of the current housing boom in respect of its duration, size and widespread degree among OECD countries. House prices have been driven upwards by relatively easy lending and low interest rates and, additionally in the UK, by demand for buy-to-let and an increase in net migration and a supply which has been artificially restricted by planning regulations. Nevertheless, mortgage approvals for house purchases rose from ?108,000 in September to ?113,000 in October this year and so it looks as though the boom continues meantime and I shall probably manage to shift my client's townhouse in time to meet his purchase but, sometime along the road......

By A Member

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