A weak economy and the recent revival of sterling has caused other foreign buyers, including Asians to become wary over residential property in the UK.
Many estate agents and surveyors are worried that the revival of UK and London property prices has started to fade, and some are concerned that property prices are still too high along with the Bank of England’s recent report that the UK economy continues to be weak.
Many estate agents also reported that Asian and foreign investors are becoming wary, as the British money recovered by 5 percent to 10 percent against the euro, Singapore dollar, US dollar and other currencies in Asia in recent months. They asserted that UK properties are no longer bargains for foreigners.
Ms. Yolande Barnes, director of Savills, told the Business Times that “with the market reaching a tipping point short-term price falls are inevitable followed by a period of low or zero growth”, adding that the robustness of major London property during the first part of the year “may have caught us unawares but our expectation of future falls has not diminished.”
“Small falls will then continue throughout 2011 to leave the UK housing market, by the end of that year, on average, where it was at the end of 2008,” added Ms. Barnes.
The recent hike in prices have been the result of a very thin market and a temporary shortage of supplies rather than any sustainable growth forces at this point, said Ms. Barnes. “This has resulted in price rises that some might call a ‘sucker’s rally’ or ‘dead cat bounce’.”
Even with the cautionary predictions, Ms. Barnes does not anticipate a price collapse due to low mortgage rates and people with high income and capitals are not willing sellers.