We are still recovering from the devastating impact that the last financial crisis had on the UK, and the world as a whole, so the last thing we want is to be hit by another one. A research think tank, the Institute for Public Policy Research (IPPR) has argued that the price of housing at property auctions Bishop Auckland and estate agents should be frozen to ensure that this doesn’t happen again.
The continual growth of house prices, at both property auctions Sunderland and estate agents, across the country means that the property industry is a very attractive one to invest in. Property developers and market investors are incredibly likely to make a return on their investment, due to this constant growth. This has caused other areas of the economy to be under-invested in, which has led to them lagging behind in terms of growth and size.
If you have looked into purchasing a home, whether from a property auction North Shields or an estate agent, you will have noticed the prices slowly creeping up over the past few years. This growth is what helps drive the property market forward and is the reason why it is a popular and safe investment.
By freezing the price of housing at property auctions Bishop Auckland and estate agents, the Institute for Public Policy Research predict that fewer people would invest in the housing industry. This is because if they knew there was not going to be a definite growth in price, and therefore a good return on investment, then they may put their money into other areas of the economy. This will, in turn, cause an upturn in those areas and help to stabilise the economy and vary the areas of high investment. This will, in turn, lower the chance of another financial crisis, as manufacturing and knowledge-based industries are often more sustainable and stable.
However, the freeze will have another knock-on effect. Freezing housing price growth for homes at property auctions Sunderland or estate agents will obviously stop them increasing in price, but it will also likely cause property values to fall by around 10% over five years in real terms. Wages and other prices will continue to rise, however, making affording a home at property auction North Shields or through an estate agent a much more realistic goal.
It will allow first-time buyers to more easily get onto the property ladder, whether they’re looking to buy at an estate agent’s or a property auction North Shields. People looking to trade up on the property ladder would also have a have a better time due to the improved affordability of a new home.
However, the change would likely cause some buy-to-let landlords to leave the sector. The prospect of zero gains in capital for five years, combined with increasing costs of interest rates and tax changes would probably price some people out and cause them to sell up at property auctions Bishop Auckland or estate agents across the country.
This would, in turn, create more property opportunities for first time buyers, allowing them to potentially snap up a bargain at property auctions Sunderland or from an estate agent as landlords try to quickly offload their properties.