123ArticleOnline Logo
Welcome to 123ArticleOnline.com!

ALL >> Investing---Finance >> View Article

Eurozone Crisis And Uk Land Values – What Might Happen?

By Author: Chris Westerman
Total Articles: 133

There are increasing questions and developments around UK land and the Eurozone crisis.


While the UK population swells, very little is being added to the country’s housing inventory due to economic uncertainty. It is a mixed picture with emergent ideas.


As the Eurozone crisis continues to hover over the Continent as well as the United Kingdom, a mix of factors is affecting the value of built property and land. In some ways, one could say the increasing demand for places to live is akin to water rising behind a dam. The question is where will that water – people who hope to own houses sometime soon – be let loose?


The Royal Institution of Chartered Surveyors said early in 2012 that “something bold is desperately needed,” as new home building is at about one-third of what would be necessary to meet demand. So where are the supply-demand dynamics of our economic system? Blame Greece, perhaps, as lenders are spooked by what might happen if the EU collapses. No one knows at the time of writing what exactly is in store, so at best we can examine certain key dynamics relative to housing. From there, the value of strategic land can be somewhat projected.


Population increase, and pensioners are staying put – The UK Census 2011 showed an overall population increase of 7 percent over the previous decade. This leads to a natural increase in demand for new housing, but another factor adds to that: older members of the population are healthier and therefore remaining longer in their homes. This reduces the supply of granny flats opening up to young couples – which, reportedly, are living with their grannies.


Wealthy foreign buyers attracted to London – Savills reports that well-off Europeans are fleeing France, Spain, Portugal, Italy and – irony alert – Greece over worries related to the Eurozone crisis. They are buying higher-end properties in London, which explains why prices remain strong there and in the South East of England.


Low interest rates driving some buyers – It is a great time for homebuyers because mortgage rates are low. The caveat on that is, of course, that the buyers must have a good credit history and a healthy established deposit, at least 10-15 percent and more if possible. Without that, buyers are unlikely to get a loan from banks that have scaled back lending due to – you guessed it – the Eurozone crisis.


Some investors building-to-let – In August 2012, The Guardian economics writer Patrick Collinson noted, “demand is there, but the supply is not forthcoming. The obvious reason is finance.” He argues for relaxation of the green belt rules, but notes this is not the core of the crisis. Instead, he offers, “one solution, barely tried yet in the UK, is build-to-let…[it] is about increasing supply, which should cap rents and soften house price increases.” He adds that Hearthstone Investments (fund managers in residential property) and Aviva (insurance) are cumulatively raising £1.5 billion to invest in new builds for letting. This mirrors some markets in the U.S., where developers are finding a stronger rental market fuelling new construction.


It’s too early to predict what, when and how the Eurozone crisis will subside and what exactly will happen with land values. But the UK continues to be an attractive draw to immigrants, and the making-babies business shows no sign of subsiding. The finite amount of land available for residential construction suggests the supply-demand curve will continue intersecting ever higher. Those looking to make alternative investments should take note.

Total Views: 130Word Count: 584See All articles From Author

Investing / Finance Articles

1. How To Spend And Invest Your Christmas Bonus Wisely
Author: Dominik Banzon

2. Central Bank Of India – Ask Bank Ifsc Code
Author: Ask Bank IFSC Code

3. Gwadar – The Opportunity Is Now.
Author: China Pak Hills

4. Dangerous Myths About The Forex Market
Author: Then Divan

5. Smart Ways To Prepare For The Tax Season
Author: John Panayis

6. Tax Tips For Teachers 2018
Author: Lauri Pitcher, CPA

7. Quick Same Day Loans
Author: John

8. How Does The Asian Trading Session Operate?
Author: Viet Son

9. 5 Most Popular Types Of Mutual Funds
Author: Vikas Malhotra

10. Benefits Of Initiating Wire Transfer From Usa To India
Author: Jack

11. 5 Tips To Keep In Mind When Using The Emi Calculators
Author: Chintu Yadav

12. Commodity Trading For Beginners – A Descriptive Guide
Author: Sophia Mason

13. 3 Tips To Improve One’s Trading Performance
Author: Amir Milan

14. With Fx Seminars A Beginner Can Easily Mastery On Forex
Author: Joyce Shen

15. Currency Trading – How It Will Be Simplified
Author: Joyce Shen

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: