Mon 01 Feb 2016
UK house prices have grown 1.6 times more than prices in the US, are we in a bubble?
The Governor of the Bank of England Mark Carney has stated when speaking to a panel of MPs his concern about the buy-to-let mortgage market in the UK. He stated “We think developments in the buy-to-let market have warranted heightened scrutiny and have done so for some time. As a general rule, any time you see a very sharp and sustained increase in activity in one area … it at least bears heightened scrutiny.”
Buy to let mortgages are driving up house prices and reducing the supply and affordability of properties to home owners forcing many to rent when they would rather buy. However these buy to let mortgages are linked to base rates and when they do rise, and with the added pressure of new tax changes, many landlords may not be able to afford the payments and be forced to sell.
The following data from Barclays show how property prices in the UK are growing faster than the UK and how London is outpacing everyone. UK property is now more valuable than it every was and more valuable than the US.
"Hello Ken, Apologies for the delay in this email but just want to say thank you so much for the splendid job you did in selling our Uncle's house. You kept in touch with us all the way and found a suitable buyer quicker than we expected. Everything went ahead smoothly, mainly due to your team's efforts so thank you very much. Kind Regards Jo"