Are Property Prices About To Crash?
Today I’ll be making some predictions on the property market in the UK and to be honest, there seems to be a worldwide property rise right now which seems like a manufactured rise in property prices.
What I mean by that is, the reason as to why house prices are going up is because the government is deliberately forcing them up and they’re doing that by incentives as I predicted this back in June of this year.
I said back then that the government is going to encourage spending as they’re going to try and push up the economy but the sellers are stubborn and so, even though we’ve been in a recession, we’re going to continue being in a recession as house prices are going to continue to soar however, I think there’s going to be a variation from area to area.
I’m going to be talking about why the rise is happening and where it is headed.
Right now, what’s going on in Bristol is very different to what’s going on in Manchester or New York and so, the whole concept of what our house price is going to do is kind of a crazy one because it depends massively on the area and when you look back at previous housing recessions, you can see that this happens time and time again where by, in 2008, there was a big recession in London as the prices rocketed but now in some parts of the north, they just plummeted.
In 2010 and 2011, we had eight to nine years of crazy growth in London as house prices doubled over there however, in the UK they haven’t doubled for the last 10 years and generally, for the last 12 months, they’ve gone up by about 7% and that’s across the entire UK.
However, the house prices are doing pretty good right now in the UK and that’s what I’ll be discussing through this article.
You need to do your own research and as I always say, only buy a property that’s going to get you a positive cash flow. Don’t buy a house and just cross fingers by hoping it goes up in value because it will eventually go up in value since over time, house budgets always go up in the UK because we’re a small island and there’s a massive housing shortage.
House Prices will Continue Rising
I haven’t got a crystal ball and i can’t see the future but my prediction is that, this housing boom is going to continue and i think it’s going to continue until the end of the year.
In a previously written article by me a couple of months ago, i wrote that there’s going to be a housing crash in 2021 and i still believe that right now and so, the reason for the rise in prices right now is because of things like stamp duty holidays.
When stamp duty holiday was announced a few months ago, it was a big deal because stamp juice is quite expensive and they slashed it for first-time buyers and reduced it for most people that are buying or investing in property.
The stamp duty holiday ends in March of 2021 and that’s why so many people are still rushing to buy during lockdown and when everybody was locked up back in April/May, there were over half a million properties that were selling and that’s over half a million transactions that were paused from selling.
Over that entire period, houses weren’t selling because surveyors couldn’t get to the properties and no one could leave their house while estate agents weren’t doing any viewings and so, everything was paused and then when they opened up the lockdown and as they began to lift it a bit and brought stamp duty holiday, suddenly people that were waiting to buy and sell started doing so and the supply and demand was high as the prices started going up.
Bounce Back Loans Helped in the Rise of Property Prices
On top of the stamp duty holiday, they did other things like they brought bounce back loans.
You might be thinking, how does a bounce back loan apply to buying a property?
Well, when everyone thinks that it’s a really good time to buy property and the government is handing out loans which are very cheap, people will of course continue purchasing property with
Suddenly, people that didn’t have much money have now got lots of money in the form of a loan that’s almost free. People were using it to buy properties and that’s what the investors are doing while the first time buyers are all desperate to buy because of the stamp duty holiday which is in place until March of 2021.
In my opinion, the rise of house prices is a manufactured boom and there’s going to be a fall because when things go up, they always come down.
The good news is that when they come down, of which they will as they’re going to come crashing down in 2021, they’re then going to go back up in time because that’s what happens if
The good news right now is that there’s a lot of opportunities as there are areas where house prices are only going to go up and up and up and you just need to find the areas.
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