London Property Bubble Bursting? UK In Unchartered Territory On Brexit and Election Mess
By: GoldCore
GoldSeek.com
Thursday, 29 June 2017
– London property bubble bursting? UK in unchartered territory on Brexit and election mess
– Evidence of downturn in London housing market
– Over 75% of London homes now selling below asking price
– Prime north London property down 6 per cent annually
– House prices have not fallen for three consecutive months since the 2009 crisis
– Bank of England report expresses worry over UK property market
– ‘Adverse shock’ to UK economy may amplify negative feedback loop
– Increased political and economic uncertainty has weakened fragile London buyer sentiment
– Bank of England Financial Stability Report: “Mortgages are the largest loan exposure for UK lenders”
– BOE FSR refers to a “self-reinforcing feedback loop” that, if triggered, would cause another 2008-style crisis in the UK
Is the London property market heading for tough times? The most recent housing figures and a new Bank of England report suggest it may well be.
Recent figures show that 77% of London houses sold in May went at below asking price, up from 72% in April. London as the capital of UK reflects international market but international investors have major concerns over uncertainties namely Brexit and the current state of the government. As a result London house prices are rising at their weakest rate in five years (if they are rising at all).
In prime estate London things are particularly bad, with prices in prime north and north west London falling by 6% in the last year.
Across the country, price drops in May signalled the third consecutive monthly drop, something which has not been seen since the 2009 crisis. Banks are well aware of what this could mean for them and as a result are now offering mortgages that scream ‘bubble bursting!’
Rates for 90% loans have tumbled to as low as 1.9% for two-year deals and just 2.55% for five-year fixes.
Yet, cheap mortgages are not enough. Buyers are getting worried whilst homeowners increase their desire to sell their properties, CityAM reports:
‘prospective buyers registering with estate agents fell from 381 people per branch in April to 350 in May, although that was up from 304 at the same time last year. The number of homes available rose 11 per cent to 40 per branch, up from 37 per branch in May last year.’
Danger for mortgage holders
The Rest…HERE
