Five Buyers Chasing Each Home in UK

Wed, 11 Nov 2009

On average, five potential homebuyers are chasing each UK home presently.

In a normal market this would be welcome news, with house prices being pushed further up. In this market, with low transaction levels, many people are concerned that this bubble could pop at any time.

So what is the situation? The problem is a lack of quality housing in the UK property market forcing increasingly more people to chase up the price of the more desirable properties .

This then gives the wider market the impression that the situation is improving although there are a number of hotspots around the UK which have a disproportionate effect on the average UK house price and headlines.

The concern is that as increasingly more properties enter the market, there will be less pressure on prices.

We may even have the situation where sellers reduce their prices in the short term to guarantee a sale.

The upwards pressure, given the economic outlook, the repossession status quo and mortgage market liquidity, cannot continue indefinitely.

The further it pushes ahead in the short term, the bigger the fall when the market "corrects itself".

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