Does the UK real estate market depend too much on London?

Discussion in 'UK Property' started by totallyproperty, Dec 20, 2013.

  1. totallyproperty

    totallyproperty Administrator Staff Member

    We all know that the UK property market is dependent on London but did you know that 25% of UK mortgages are connected with the London property market?

    Is this too much? Then again the London property market seems to attract massive overseas investment - does this help the wider UK property market?
  2. Sherryf

    Sherryf Banned

    Why not? Being the capital, property market should be dependent on London. But the government should work to make the influence of property market country wide.
  3. totallyproperty

    totallyproperty Administrator Staff Member

    Hi Sherry

    First of all welcome to the forum - we hope you enjoy your stay :)

    I agree with what you say but my concern is that the cost of property in London is head and shoulders above that anywhere else in the UK. Has the London market become detached from the rest of the UK?


  4. Sherryf

    Sherryf Banned

    Hmm... You're right man! London property market has gone beyond the capacity of common people. Buying house has become tougher than it ever was in the past. I'm looking forward to your post to see peoples perception to overcome this situation. Anyway thanks for welcoming me! :)
  5. totallyproperty

    totallyproperty Administrator Staff Member

    I am not sure that the London market will ever get back into the reach of "common people". I think it is more likely that London will attract the wealthy of the UK and overseas investors. In many ways London is a mini-country within a larger country - with an economy and property market which often bear little or no resemblance to the wider UK.
  6. charlijay

    charlijay New Member

    Interesting point - I think if we're talking about commercial property, obviously as an economic center of a country we probably do. But I have read recently that the UK commercial property market is diversifying into cities like Bristol.

    JAMES TANNER New Member

    I think that, as it is very easy for overseas companies and investors to buy property in London, that this is the reason that property is so astronomically expensive. I have been away from home for a few years, and from what I can gather, it's still incredibly hard for first time buyers to get even one foot on the ladder. Hope this changes.
  8. I believe that property in London, on average, went up by £50,000 last year. Which is insane, especially in this economy.

    I think everyone knows that if you want big money in property, you buy in London.

    However, due to this, I feel as though property prices are just becoming extortionate in London
  9. totallyproperty

    totallyproperty Administrator Staff Member

    The main impact behind the ongoing rise in London real estate prices is most certainly overseas demand. We have seen enormous funds flow from China into the London real estate market as well as many other areas of the world including the United Arab Emirates. Prices in London are moving beyond the average UK citizen which is in many ways scandalous but a sign of the times and the fact that London is seen by many as a real estate safe haven.

    Do you see London as a real estate safe haven?
  10. One half of my says. Yes, hop on the train and reap the rewards so to speak. But, another half of my says "Is it too good to last?". After all the whole reason the banks are in their state is because they were handing out loans left right and centre thinking that the never ending money would never end....and look where we are now

    Is it possible that London's glory days will end in the future, and in fact see a plummet in prices?
  11. totallyproperty

    totallyproperty Administrator Staff Member

    I think London will always be one of the major real estate markets of the world predominantly because of the financial markets which it supports. However, like you, I just can't see how the market can keep going up and up and I would expect to see some kind of correction, although not a collapse, in the short to medium term.

    Try as authorities such as the Bank of England do, they are finding it really difficult to control international investment in London. Talk of levelling the capital gains tax playing field between domestic investors and overseas investors continues.
  12. Sorry, plummet was probably a poor word to use. But it will definitely level out at some stage. My prediction is we will have another "boom" in London when we finally exit the recession, and then once that brief boom is over and done with, it will start to level out a bit more.

    London will always be the most popular property area in the UK.

    Personally, I prefer smaller markets. I focus my efforts in Glasgow. It recently got named the best city to offer student accommodation in the UK. I recently bought a 4 bedroom flat, within a mile of Glasgow University for just under £100k. All cosmetic upgrades (Just paint and new carpets).

    My point is...with a city like Glasgow, you can buy affordable property bang in the centre. What would an equivalent sized London property be like in the centre?! Upwards of a million?

    Then again...I'm in the market for Buy-to-Let, as opposed to pure appreciation.
  13. totallyproperty

    totallyproperty Administrator Staff Member

    Scotland is an interesting subject at the moment, I actually live in the central belt of Scotland and all of the talk at the moment is surrounding the independence votes. I think the vote will be closer than many people think but what would you expect to happen to the Scottish property market in the short-term if independence was confirmed?
  14. If independence is confirmed, I'll be packing my bags haha. I realise many will disagree with me. However, I think a lot of the "pro independence" claims are very farfetched. There was talk on the radio of Scotland not being able to keep the pound if we vote in favour. I also think Alex Salmond is for use of another word...a nincompoop.

    I'm confident a large percentage of people voting FOR independence are purely doing so because of a large "Braveheart Factor". The Scottish hate the English, simple as.

    As for property. I don't think independence will have a positive impact. Especially for me who invests in student accommodation. A large reason why Scotland is so popular for students is because Scottish residents get free tuition. An Independent Scotland won't be able to maintain that.

    There's Pros and Cons for both. But it's all personal. For me, the cons outweigh the pros.
  15. totallyproperty

    totallyproperty Administrator Staff Member

    I am English but actually live in Scotland so, like you, have to be a little guarded on my comments about independence. However, let's say that I would not disagree with your comments :)
  16. I too, am also English :p

    I go to university. Hence my understanding of tuition funding etc (I've lived here long enough to qualify for it). The general feeling for me is. The only people who want Scottish Independence are very "Pro Scotland" people (Or as I called them "FREEEEEEDDDOOOMMMists")...and the uneducated who don't clock on to Alex Salmonds Bulls***

    I think a lot of English people will leave Scotland if it goes independent, which could have a HUGE effect on it's economy. In the Scottish Borders and Edinburgh, I'd say a very large percentage of people are actually English.
  17. As a matter of interest. Where in the central belt are you?

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