UK Buy to Let Landlords Should Wait for 4 More Years
The latest forecast of the National Housing Federation (NHF) suggests that UK property investors who purchased buy to let property in 2007, at the peak of the housing boom, might be trapped in negative equity for 4 more years.
According to the organisation's report, house prices in the UK will reach the levels they stood at 3 years earlier only in 2014, which means that landlords will have to wait 7 years to recover their money.
A separate report published by experts of Oxford Economics suggests that UK house prices will grow by 22% in the next 5 years.
As such, they are expected to grow by 7.5% by the end of this year and then to fall by 3% in 2011. The years of 2012 and 2013 are to see house price increases of 0.9% and 4% accordingly. Further rises of 5.4% and 4.9% will be registered in 2014 and 2015, says Oxford Economics.
The low house prices, however, do not mean that property affordability is improved in the country. NHF says that many Brits still prefer to rent rather than buy houses.
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letpropertyrentproperty say consumer confidence and restrictive credit conditions are at the heart of property price falls. Talk of cuts in government spending and concern about the economy is affecting people’s confidence in the housing market and an increase in the supply of houses likely to mean a reduction in prices. Few first time buyers can afford the 25% for deposit, with those people that have money to invest probably are finding better opportunities in other sectors.