The housing market seems as though it is going to be split in half in 2011, in some areas house prices will drop by 3% to even 10% in places such as the Midlands, Wales, Scotland and northern England. Many people in these areas rely heavily on the public sector for employment and because of the cutbacks many could lose their jobs. Areas such as central London and the Home Counties will continue to flourish with property prices rising %5. This is because the buyers in these areas are not affected by mortgage lending restrictions and the Vat rise does not deter them.
The rental market is flourishing all over the country due to first time buyers being forced to rent as they are unable to get a mortgage. Deposits are so high for them that they are simply priced out of the market. Many of the property moves of 2010 seemed to be with the wealthy that held a lot of equity in their homes, the poorer owners and first time buyers were few and far between. Some are even speculating that by 2015 some homes will be worth no more than they were before the recession hit in 2007. Northern England, Wales and Scotland again fall into this bracket. The south of the country will see rises in their property prices, London prices will be about 30% more than they were in 2007. It all seems to be down to your postcode, below are some areas that may buck the trend.
·A planned community will buck the trend this year. Developments which have a school, surgery and convenience store will be high on people’s list. Lower quality new builds will not do as well.
·Some areas of the north of England will buck the trend. Cheshire is always a property hotspot but Harrogate and Wetherby in Yorkshire are even wealthier areas. Manchester may see the Salford Quays do well due to the BBC moving up there and creating 1,500 new jobs.
·Self builds may increase due to plots being 10% cheaper than last year. Many believe that self building will increase by 20% this year so act now to get a plot that you like.
·Cambridge house prices are soaring, there are few public sector jobs there and there are many high fee-paying foreign students. The research sector is doing really well there and their new housing developments are being marketed to overseas investors by companies, the only place outside London to do so.
·If you live within 75 minutes of London you should be OK. It means that you can work in the city but live in the country.
·A market town will always do well, retirees prefer market towns to retirement villages and the baby boomers are just approaching that age now.
·Aberdeen is doing well; it outperformed the rest of Scotland in 2010. House prices rose here by 15% last year while the rest of Scotland simply remained stagnant. Many believe that it will do just as well in 2011.
·Buy-to-let landlords are doing really well at the moment as rental increases are plenty. Rentals in London rose 5% in the three months to October and supply is down.
·Good transport links are essential in a time when petrol prices are an all time high. Kent will always do well with its proximity to London and areas around the HS2 high speed rail link will blossom for commuting to both London and Birmingham. Make sure that the homes are not going to be demolished to make way for it though.
·London will always do well, 50% of people buying in the capital do not need a mortgage and 30% of buyers are from overseas. It is estimated that house prices in London will rise %5 in 2011 and 7% in 2012.