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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.

"To David, We cannot thank you enough for all of your hard work in selling our house and helping us purchase our dream home. We know that it wasn't the easiest of times so please crack open this bottle and relax and unwind one evening. Thank you again for all of your help. Ben & Laura "
Ben & Laura