Experts claim that a UK property crash is likely, as house price growth comes to a standstill.
According to recent data from surveyors, most homes are selling for less than the asking price. Just 1% of surveyors reported that house prices had increased during July, whereas in June, 8% of property prices had increased. In addition, properties in the South East are now cheaper than they were five years ago.
The Royal Institution of Chartered Surveyors reported that the weakest reading since March 2013 occurred in July this year. The report also points out that the more expensive properties are suffering most when it comes to prices falling. The study found that homes are selling for less than the original asking price.
In the property bracket where homes are selling between £500,000 and £1m, more than half sell for a lower amount than the owner asked for, while more than a third (37%) of homes with an asking price of less than half a million sell for less than the asking price. The chief economist at RICS, Simon Rubinsohn, said that the current standstill in property prices had been caused by a shortage of new properties following the financial crisis, as well as tax changes.
However, in some areas of the country, property prices continue to increase – especially the South West and the West Midlands. A leading government minister has warned that stamp duty would be responsible for a property crash, while experts warn that a property crash may result in property values falling to £70,000.
CeMAP qualified mortgage advisors, meanwhile, continue to distribute sound advice to those who are looking for a suitable mortgage.
