Most of the people from the UK are confident regarding the rise of housing market, but some industry experts and investors do not confirm this belief, as reported by AIC.
The people from United Kingdom are confident regarding the surge in housing market. Almost two-third of the population is expecting the price of the market to continue growing, according to The Press Association.
AIC (Association of Investment Companies) conducted a survey that revealed 62% of the people thought property market would grow in value while only 21% of the people forecasted the market would not grow, fall in value terms or even collapse. The survey also found that investors did not have too much confidence in housing market as only 44% thought it would continue to go up.
As per the survey, the five interest rates increasing ever since August 2006 troubled the landlords and owners of second-homes. Around 30% said that the profitability or the value of their property investment was affected. But more than half of the people are of the opinion that housing market in the UK will outshine all the other sectors in the years to come.
"The general public and active investors' optimism in the housing market could well be misplaced, as there is increasing evidence that the housing market is slowing down following five rate rises and the recent credit crunch. This survey demonstrates that the rate rises are already beginning to hit people's finances and could well undermine future confidence", Annabel Brodie-Smith, a spokesman for AIC, as per the reports of Guardian Unlimited.
Some industry experts said that the housing market would progress only by the increase in employment. Even if the higher borrowing costs give pain to the rising number of landowners, the labor demand will generally remain steady. This will prevent fluctuations in the residential property. The experts also said that the house prices in the UK had a strong run but the recent turmoil in the financial market has raised doubts if this stellar performance from capital is going to continue.
A Senior Research Analyst at RNCOS said, “Analyzing the market by using a model of key driving forces is able to justify higher housing prices - from the increasing incomes to the borrowing costs and the population. The people who want to become landlords are also thrusting the number of new purchases, as these aspiring landlords believe that the rental payments would bring in sufficient money to clear the profit and pay for the mortgage”.
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