By 2020, there will be a 200,000-plus home shortage in London, England, say analysts. The city’s property market, which has been in high demand both locally and abroad for years now, has been called “one of the worst housing problems in western Europe” thanks to cuts in grants for social housing, a lack of construction and aggressive overseas buyers who are pushing prices up and out of reach of “ordinary families”[1]. Because of the relative lack of construction, areas that do manage to attract developers that can fund their projects become “hot spots” for investors both at home and abroad, which drives prices quickly and exponentially upward. For example, one new development is expected to appreciate 140 percent in the next five years.
While this trend is, overall, pushing the London housing market in a positive direction, analysts warn that it is pushing out first-time buyers who are having trouble getting mortgages[2]. As a result, the English property market as a whole is largely fragmented both by region and property type, with properties that traditionally have attracted first-time buyers sitting empty while nearby larger buildings skyrocket in value. Nevertheless, Richard Sexton, business development director of e.surv comments that “the housing market across the country is moving in the right direction” overall. Does it sound like it to you?
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[1] http://www.thisislondon.co.uk/standard/article-23985233-record-housing-shortage-will-force-families-out-of-market.do
[2]http://www.mortgageintroducer.com/mortgages/241250/5/Industry_in_depth/Housing_market_defies_August_dip.htm
