The UK Housing Market Appears To Be Riding On Quick Sand
What is going on with the UK housing market? A recent study conducted by Lloyds Bank shows a sharp decline in home purchases in select areas of the region. Lloyds Bank show statistics where some areas in the UK are seeing transaction numbers 30 percent lower than that of the period right before the financial crisis. In particular, the community of Brent in the northern part of London experienced home sales decline by a third last year. Berkhamsted in Hertfordshire also saw completed home purchase transactions decrease by a third in 2016. It is quite interesting to see such decline in sales in Brent and Berkhamsted since these areas are considered affluent communities. Essex and six other nearby London boroughs were also counted among those with underwhelming home sale numbers in 2016.
Sales Increased
Although several wealthy neighbourhoods have suffered in the field of home sales, a few communities in England and Wales have thrived during the past twelve months, which may be good news for the top lenders for 2017. Northwest areas along with regions in the Midlands have attracted enough buyers to show improvements in statistics. Retford in Nottinghamshire actually saw one of the greatest increases in homeownership since 2006 last year. Cannock in Staffordshire and Nelson in Lancashire also experienced a significant increase.
What Is Going On?
Overall sales in the UK may be on the decline but home prices are steadily rising. Areas that have improved numbers in the home buying department suffered the most during the financial crisis. It makes sense, then, that these communities would be on the rise since they have not reached the climax of their recovery like more affluent neighbourhoods may have during this period of stagnation. Meanwhile, valuations continue to rise in Wales, London, and throughout England.
What is interesting with the UK market is that even though home sales are declining, the demand for property continues to outweigh the supply of homes on the market. This phenomenon points to the notion of buyers living within their means by avoiding expensive mortgages and waiting for homes that are within their price range.
While recent activity appears troubling, such precautionary measures could actually lend positive results. Buyers who overextend their budgets find themselves on the verge of default and foreclosure that negatively impacts the economy in a big way. Buyers who are frugal, however, ensure that they are in their home for many years, which in turn guarantees residual income for the economy. The UK housing dilemma may actually be the making of consumers learning from previous experiences and vowing to improve in the area of financial prudence.
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