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.
"I am writing to thank you formally for the excellent service my mother and I received from you and your colleagues with her property sale. I very much appreciated the courtesy and understanding in your dealings with my mother before she moved to Wokingham and with your professionalism, prompt communication and proactive handling of the sale. This certainly made my life a lot easier knowing everything was in a safe pair of hands."