The UK property market has been one of the best performers over the last decade and indeed London is in a league of its own compared to any other real estate market around the world. The UK economy is performing better than the vast majority of competitors, the UK budget deficit is slowly being reduced and confidence is starting to seep back into the employment market. Against this background it was not a surprise to see UK property prices moving higher during 2014 but we are currently experiencing a winter lull in demand which offers an interesting opportunity for brave investors.
Property prices discounted in December
Property website Zoopla has confirmed that 33% of properties listed on its website have been discounted at least once as demand falls during the winter period. A number of properties have been discounted more than once with the average price reduction around 6.7% which equates to just over £24,000. This figure of 33% is probably towards the high end of the average seasonal drop of recent years due to a number of situations coming into play.
Even though the UK economy is performing better than many had expected, new property purchase schemes have been announced by the government and interest rates are unlikely to rise significantly in the short-term, affordability factors are now coming into play. These are issues which were mentioned time and time again by sceptics of the ongoing rise in UK property prices and it seems that only now are they being openly discussed.
Quote from PropertyForum.com: “While there is no doubt that the London real estate market has led the way in the UK it would now appear that the remainder of the U.K.’s 20 cities are now picking up the slack.”
Is it time to stock up on UK property?
The reality is that a number of factors have come into play which have pushed down winter demand for UK properties and forced those looking to sell to reduce their asking price. This may turn out to be a great buying opportunity although it has to be said that worldwide economic issues are also impacting sentiment.
It is very difficult to escape the ongoing problems in Russia, the East v West situation coming back into play and the impact a falling oil price is having on worldwide economic growth. This may end up being the “perfect storm” for those looking to increase their UK property exposure but many of these issues will not be resolved in the short-term. The Russian problem comes and goes, the oil price is only expected to recover slightly this year and next year and political differences between various countries are also becoming more of an issue than they have been in years gone by.
Taking a breather
On the surface this may look like an interesting buying opportunity for UK property but the wider picture is a little more complicated. It is advisable to take professional financial advice when looking to acquire property in any country and ensure that it fits in with your investment and lifestyle profile. If UK property prices were to fall significantly we would no doubt see some underlying support at lower levels but with so much uncertainty regarding the global economy perhaps it is time to take a breather and let ongoing issues work through the system?