The housing market is one of the driving forces behind the economy of this country. Over the last five years, it has gone from a slump to what people term as a housing bubble. That means prices are artificially high thanks to speculation and the measures taken by the government to stimulate the market.
The market virtually came to a standstill in 2009 when banks decided to hold onto what money that had after years of irresponsible lending. It became difficult for people to get a mortgage, and it was clear that we must do something about it. The government opted to keep interest rates low. They introduced the Help To Buy Scheme that would encourage banks to lend by guaranteeing large deposits on the mortgages.
Help To Buy
This system makes it easier than before for people to raise the deposit they need for a mortgage. The lenders ask for twenty percent. Under the Help To Buy, the government funds up to fifteen percent of the deposit, leaving the buyer to find only five percent. They must start to repay the balance in five years time when their finances are stable. This system encouraged people to look for their dream home in the estate agents in Cowes, and got the market moving once more.
In April, the criteria changed to make it harder for people to qualify for a mortgage. It is an attempt to reduce demand for homes and thus to calm the market. There are other options open to the government, and they may implement them at any time. The interest rate is still low, but there are rumors of a rise in the pipeline. The Help To Buy scheme could be put on hold if the other measures prove ineffective.
The experts expect house prices to continue to rise. RICs recon rises of more than five percent per annum for the next five years are likely. These rises will have an adverse effect on those trying to get a foot on the housing ladder. Indeed, many people will be frozen out of the market forever as prices soar out of their financial reach.
It has always been wise to invest your money in bricks and mortar, and it would appear that it remains so. The expected price rises up to 2020 which will amount to about thirty-five percent show that you can make a profit from the investments.
Those who are on a middle income would do well to think about buying a home before they are priced out of the market. It is unlikely that property prices will fall significantly, so this might be their last chance to own a home.
Those who already own a building have an opportunity to improve their home and take advantage of the price rises. By enlarging the kitchen and adding an extra bedroom now, they are sure to profit from it in the future.
I hope you have confidence to invest now that you know the facts. The country is to become a land of owners and tenants. Which one do you want to be?