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"Summer Recovery in the London Housing Market" There are growing signs that in London, the demand for residential property is returning this summer, after a tough two years. In past recessions, residential property has been the first market to decline and the first market to lead the recovery, and the buyers are now registering in large numbers as confidence returns and they recognise the point in the market cycle that has been reached. Several factors support this view. Historically two years of value decline has been folowed by two years of static prices, before demand again began to outstrip supply, causing values to increase again. Secondly, yields from bank and building society deposit accounts are at an all time low, causing savers to consider alternative investements such as "bricks and mortar". For example, now surely is the time for parents to transfer funds to their children to assist them in purchasing their first property, thus investing in a capital asset with growth potential, and reducing future inheritance tax liability at the same time, without losing much income. Thirdly, investment in rental property seems attractive as, despite the decline in rents now achievable, low capital values deliver a higher yield than in recent years. Although the finance world will never be the same again, and there will be no return to the manic and irresponsible lending culture that sparked the global meltdown and caused this recession, cash is flowing more freely for motgages, providing the borrower has a good credit score. I believe this trend will steadily increase during the course of this year and into the next. If you are hoping for a 120% mortgage forget it! Those days are gone forever! For centuries, in these islands, we have assimilated home-owing into psyche and culture and there is no greater feeling of happiness and security in owning one's own flat or house. Now is the time to buy.
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