Are the properties in England expensive
Investing in properties is the most popular method of locating a capital . The polish people who live in Great Britain are very interested in that topic. If you have the properties on your own you can live there or make a plan for profitable investment. You can rent the bought house or apartment and then after years sell it with huge profit.
The prices of properties during the years
The prices of properties in England are growing up so in long term perspective investing in them may be very profitable. It is enough to look at data from the last few years. At the end of 2015 the prices had increased above 7% in relation to the previous year. The House Price Index (HPI) is the one of the most authoritative indicators showing changes of English properties.
Every month data is compiled on the basis of many factors. Amongst others there are some aspects to consider like the prices, age and location of properties. The investors and buyers of properties use HPI during making decisions about their purchase.
It is worth here to highlight that in the end of 2015 were found almost 20 percent growth of that factor in relations to the 2008. Currently the prices of houses in England are worth from about 300 to 400 thousands pounds.
If you are wondering where you can find the prices of properties in the UK you should necessarily get to know with the below diagrams.
Below the diagram is showing the average prices of properties in the UK. There is a visible crisis and a hillock in 2007.While looking at this diagram now we may think that the prices at the top in 2007 were low. Today the market is overcrowded. In the article tittled „the prices of houses in the UK” I was writing about main reason of those high prices and it is the market in London.
I didn’t want to get a job in BMW in Oxford 3 years ago when I knew the prices of properties. They offered good money but I would have to pay higher amount for house that I’m renting in South Yorkshire. The differences in value of money are not quite big. Of course for this state of matter are responsible the low interest rates about which I write below.
Nowadays according to UK House Price average prices of properties, the price is the following: £226,000 (July) and the difference between prices from last year is about £11,000. The prices are changing really fast and it is hard to save such amount of money by the large majority of the inhabitants in the UK. The average earning in the UK are low nowadays and every year the living costs are getting much higher.
Do you live in London? – Sorry, the atmosphere with high prices is on the agenda
As you can see the diagram shows that the prices in London differ from the other England regions, quite apart from the UK as a whole. If you are going to do shopping in London – you overpay. When someone says you the property prices are getting higher all the time it means that the person is stupid or he try to sell you the house or credit for that house.
The property prices are dependent on many factors like interest rates, inflation, migration policy, cycle etc. There are moments that the prices will be getting lower or stuck in place and the inflation will perform its task properly. It is common in Poland currently.
Who have enough money to buy a property
The property prices in the Great Britain may seem too high from the perspective of Poland. The average earning in both of these countries differ greatly. On the Islands the price is as the following: 2 250 pounds, every year it is above 27 thousands pounds. The income of Polish people working in the Great Britain are much lower.
According to data published by National Bank of Poland they earn about 1 300 pounds monthly. In Polish currency it is 7 650 polish zlotys. This is a very good result in comparison with the average inhabitants’ income in the country.
Firstly I would like to dispel myth. Please remember that dependence exists between the properties prices and the value of interest rate. Here is the quiestion. Wheter the money are cheap or expensive. Currently there are very low interest rates what means that money are very cheap what is equivalent to the high prices of properties.
However while considering purchase of property you should take into attention the amount of your actual salary but also the profitable prospects in the future and current expenses.
The household budget is debited by the buyer who want to purchase house, apartment or take credit in the UK. If you are going to by property and then rent it, the payments from the renters can cover regulations in the bank. As it was mentioned the following method is a very good way to invest earned money. In the Great Britain the interest in renting houses is steadily growing even about 30 % per year. According to statistics, the owners of houses will find the renter without any problem.
You should necessarily get to know with one of the most popular government programs supporting the purchase of the first property in the UK.
It is worth to have control of the given money. In case of the random growth of interest rates you will be able to determine your own abilities. As it happened in Turkey or Ukraine. A 2-percent or 3-percent mortgage is OK. Now imagine that you have to pay a 9-percent mortgage. It is very common. As the above diagram shows the current interest rates are not a standard but a temporary chaos maded by debt and excessive printing of money.
It happened in Poland with „believers in frank” cause the believed that frank will stay always low. Unfortunatelly it happened otherwise. Nobody likes bleak scenarios. Unfortunately the market in Poland is under control by the greedy banks which apply its own rules. Recently I asked about possibility of taking credit in pounds for house purchase in Poland. When I saw the presented conditions I was shocked. Unfortunately I think that it is not a credit but facility in relations to the price of pound being presented by next 20 years. This is the way it should be presented.
The similar accident was with frank believers. Naturally if I earn pounds I can make such facility. However we should not cal it a mortgage. I would like here to mention the variable interest and other tricksof which has been noted recently. However the Poland is still a country where legal stealings have place. Many of false mortgage credits have their ending in courts.
Check the real price of credit for house in the UK before you even think about credit for house
When you are the only person who are going to take profits from the property it is necessary to generate some extra money for instalments payment. An important concept i salso your own contribution. In many countries after the end of huge crisis which have started from properties market, there were provisions with requirements concerning the potential borrowers. The financial institutions verify very cautiously their clients.
There is dependence between your own contribution and the interest rate on past-debt. Therefore before you will take it you should try to save the maximum possible sum. You can decide on buying the property situated in the district away from the center and even in the suburbs. The prices there are lower.
The properties’ prices never drop and they always go upwards?
Everyone has heard of it many times. The myths like to circulate and they have their own source. It may seems the truth when we will analyse the below diagram.
Above diagram shows that the prices always go upwards and they never go down. However if you look at perspective of so many years it is truth. The prices should be analysed in perspective of 5 years. The following graph doesn’t have the factor about which many people forget. Mainly tt is called inflation.
Now let’s look at the diagram adding the value of infaltion. It all looks different now. Everyone knows that 10 years ago for 100 pounds you could do nice shopping in market. Today the same amount of money in ASDA is completely something different. While considering the graph with value of inflation the average prices are below the last peak. However over time the prices go up in waves.
Are you able to repay the loan?
A decision about taking credit for house requires eaxmination of our earning due to instalment amount. People are trying to cheat and they take credit for 30 years or more. It is a good solution for investors who are interested in Cash Flow but I don’t recommend it for your own house. We allow for taking our money in form of provision by the bank. Therefore the below diagram shows the dependence in time how repayment of loans looked like.
The credit can take 20% or even 50% of our incomes. There is dependence from interest rates. Currently they are very low. The graph presents that there is 30% taken. There were times when it was taken even 50%. Nowadays many families suffer from this because paying even a 50% of your own income for house is a huge debt. The following value should be in ranges of 20%. Then such credit isn’t a big ballast. How it look like in your case?
What are conclusions? If your credit on house takes 50% and when interest rates will return to normality you will not be able to repay the loan and bank will take your house. Thus you should be ready for it. A nice idea is to find a better job or find extra task to do. Otherwise you will regret in a future that the bad banks take your family’s house.
Simply put it is about the amount of your each year earned money for paying house in the UK. There are some average and withstand values. It is expensive and cheap. Majority of the Polish society earn within the average national market.
In 2007 the average indicator was 5.4 (London 7) As the diagram shows later took place the breakdown and for England it was on the top, for the North it is still below (I’m very happy about paying the same amount as you in London per one room). The London region jumped on. The conclusions are clear. If you live in London to spend many more for apartment than the rest of people in the UK.
The below graph for England and Wales. It is easy to conclude that the London market conquered statistics. For today you need to spend more of you income for apartment than in times of housing bubbles developed in 2007. However if we disregard the London from statistics it turns out that the prices in the UK are still attractive. On the condition that your income is sufficient cause you must be ready for the growth of interest rates what means the rise of credit rates.
I have verified the location where I’m looking for the property. In the 1999 House Price to earning ratio was 2.7 and it reached the top in 2008 with the value of 5.2. It increased twicely. In other words, you needed to pay the amount from your income two times bigger for credit than in 1999. The ratio decreased to 4.5 (data for 2016) It means that buying house in that place will give me the cheaper price than it was during housing buble in 2007/2008.
It is worth to mention here that the higher value of factor is the more you need to worki f you want to pay the whole property. This i show it looks like in practice. I have verified factor for Oxford and it turned out that I would need to work two times more for the same house. Here we can chenge the point of view about properties. The most often irrespective value is provided but not information about how long we need to work for it. Thanks to that trick you will be able to adopt a sensible decision on this matter. It presents differently in case of investments for renting or for flip.
Why the prices in London are so high
At first it is the most favourite place where investors from all around the world can meet. In addition the London population is growing at an enormous rate. To 2029 it will probably grow do over 10 million inhabitants from 8,3 million currently. The amount of builder houses is not equal to the increasing demand. It is all what I have described in this article.
The localization is essential
In Lonon the prices of properties are growing very fast. Let’s consider that you want to buy a house or apartment in London. The huge expense should be taken into your account. It all depends from the district of town. Unfortunately only a few people can buy properties in the city centre. The average purchaser must to looking for place in other parts of British capital. The purchase of more expensive property in a good location may bring more profit in the future.
The fact is that the average price for property in London is higher for about 200 thousands pounds than in the other parts of England. In Wales or Scotland the differences are more spectacular. The cheapest properties you can get in Northern Ireland. I have to admit that I wouldn’t like to live there. Take into account the higher amounts for living for example transport costs. The salary isn’t quite high in comparison to the other regions.
The question is: Is it worth to move to London?
If you are wondering, in which region is it worth to buy the property you should necessarily get to know with post on blog entitled.: Where is the best place to live in England?
Is it worth to buy a property?
As I mentioned above the profitability of investing in properties depend from different factors. Many people want to have the most data as it is possible until they will make any decisions. Then thay are looking for practical information in a few places. The one and the most chosen tools is the the price comparison engine of credit offers.
It is enough to enter the basic data concerning the planned debt as such the high tor time for paying ant hen you can analyse available offers. You may also use the credit calculator which will help you in making a plan for paying your credit. It is recommend to seek the assistance of financial advisor. It is worth to meet with him in order to describe the individual situation of client and check the available options. The purchasing of house in the UK is a serious decision which you should agree with financial professionalist.
The safe investing in the properties
During the conversation with the financial advisor will definitely appear a topic about earnings. That is the factor deciding about a credit worthiness and it gives review about profitability of investition. In the Great Britain the earnings are systematically growing (expect from the few last years) but the prices of properties are changing in different pace depending on region. It is worth to check the trends in place where you are going to buy a house or apartment.
You cannot predict the future in a whole but the position on a local market is not changing from day to day. Amongst others it is good to make sure that the average salary in a given place is growing up and what are the differences between the salary in relations to sex. Until you will take a credit and decide to buy a property it is necessary to secure yourself in different ways. You should collect a lot of information. However even the more expensive house or apartment have a chance to be the best investition
Is investing in the UK profitable?
The costs of living in the UK are getting higher nowadays. Someday a singlewage was enough to live. People don’t save money. They prefer to say „We live only once” and buy new car cause it is presenting so nice next to the house (Very often I see new car for 20 thousands pounds and it has a car parking with a value of max. 80 – 100 thousands) It is the reason why people don’t have money to purchase a house in the UK.
More and more people hire houses and the huge market is directed into immigrants. It makes that investing in renting houses is a very profitable business especially when the credits are low, the possibilities of having remortgage (it not exists in Poland) and it has relatively stable law and developed market.
Below diagram shows that renting in the UK proved to be a great success. More and more people want to rent houses.
The funniest thing is that the cost of credit is getting lower and the prices of properties without considering London in relations to inflation are lower than in times of last house bubble. It makes that people are still renting houses. However you may notice how people spend their money and how many credit card they have in their wallets. People spend more than they earn.
The summary of post are the properties in the England expensive
I wrote a lot about it. The topic is very deep and you should consider it in order to buy a house for you or for renting. In the case of Polish people you need to take mix. That means the purchase for your own usage and in the near future with the possibility of selling or hiring. It is sure that the half of Polish people will come back to Poland because the differences between Poland and the UK are getting smaller.
In the summarize you should remember about very essential thing. How many years you need to work if you want to get a house and compare it to historical values (if you will add yourself to mailing list you will get a link where you will be able to check it) and the prices of properties depending on inflation and a region.
In the end we will consider the value of interest rates which you should compare to the historical values. The information determine whether the prices of houses in England are expensive or cheap. Naturally you will not get one clear answer because it is hard to foreseen the future. It will give you answers to questions if it will be expensive or cheap and if it is for me.