With the economy on the rise, prices in the housing sector are creeping upwards, prompting what many real estate experts believe could be a major crisis in the cost and accessibility of housing to Britain’s employee base. Despite a fall in net exports, Britain’s economy has slowly recovered over the last year to a point of relative stability, although not everyone is reaping its gains.
City employees have been praised for improving economic stability – an unusual situation given then immense criticism many leading UK banks had been given just months before the economy began to improve. Yet with major banks and employers leading the UK out of its biggest trouble period in recent history, many believe that increased housing costs could hit employees hardest.
The average cost of a home rose from £166,351 to £167,425 in July – an increase that, if continued, could see the domestic housing market become one of the most costly and relatively inaccessible in Europe. Housing prices in the greater London area – one of Britain’s most important economic areas – are even greater, prompting many real estate experts to worry about a second housing ‘crisis’.
Property economists have highlighted the volatility made clear by such sudden increases, claiming that the UK’s housing sector will continue to attract rapid changes in value over the next year. July marks a high point for property investors – it appears that prices may begin to decrease towards the end of 2010.
For many first-time homeowners, that would be a very good thing. With unemployment still at high levels and Britain’s economy recovering slowly, higher housing prices will put property out of reach for hundreds-of-thousands of employees. Should price instability take over, many of Britain’s most enthusiastic real estate investors could see a lucrative, or disastrous, end to the year.