INTERNATIONAL NEWS
rime property asking prices have increased by 40% since the recession of December 2007 while overall property prices are down £11,152 ($18,000) over the same period, new figures published by the global property news service PropertyWire show. Prime property owners are on average £86,785 ($141,000) better off
UK PRIME PROPERTY ASKING PRICES UP 40% SINCE RECESSION P
now than they were in December 2007 as asking prices rise at the top end of the market, according to the latest index from property website PrimeLocation. Since the recession began in late 2007, the average asking price of a home in the UK has fallen by over £11,000, but the value of prime property,
the top quarter of the market by value, has rocketed in the opposite direction. In December 2007, asking prices for prime properties averaged £387,969, a figure that has increased by 22% since then, average to £474,754. In contrast, the general market has seen prices slowly sliding down
over the past few years. Asking prices fell for a continuous six month period in 2011, and the current asking price of a UK property is now £219,526, or £11,152 less than pre-recession prices. Te increases at the top end of the market are consistent across the
country, and can be seen in every UK region, though some places have seen prices appreciate much faster than this. London prime properties have seen asking prices rise by 40% and those in the East of England are 35% higher. “Te overall UK market has not recovered substantially since the early
years of the downturn, but this hasn’t affected all homeowners equally. While the overall UK market saw property prices plummet in early 2009 as the credit crunch took hold, owners of prime homes saw their property values perform well as demand for the most desirable properties continued to rise, lifting prices with it,” explained Nigel Lewis, property analyst at PrimeLocation. “Tis isn’t restricted to the hyper exclusive parts of central London either, though these areas have admittedly benefited from interest from international investors. Instead, it’s a more general flight to quality that we’ve identified in every area of the country,” he added.
buy a house, a recent poll by the US opinion research firm Gallup shows. According to the survey, the current level of home ownership marks a decline from 68% in 2011. For most of the prior decade, roughly seven in 10 Americans reported
US HOME OWNERSHIP HITS DECADE LOWS H
ome ownership in the United States has declined to 62% while 70% of the surveyed people believe that now is a good time to
owning their own home. While the recession and financial crisis took place in 2008-2009, homeownership rates didn’t begin to reflect the bursting of the housing bubble until 2010, when 65% of Americans reported owning their own home, the lowest level recorded before this year. However, about 70% of surveyed people believe that because of lower home prices and continued low mortgage interest rates, now is a good time to buy a house. Tis percentage is similar to the past several years, but up from 53% in 2008. “Most Americans recognise that now is likely a good time to buy a house. Mortgage rates remain at historical lows and Federal Reserve policy seems determined to keep them low for some time to come. Relatively stable prices and low interest rates would seem to make buying a house extremely attractive in many local housing markets,” Gallup said. However, “potential home buyers can take advantage of today’s low mortgage interest rates only if they can meet significantly more stringent down payment and underwriting standards than was the case prior to the financial crisis,” the report pointed out. “While record home foreclosures and distress sales resulting in declining house values have also played a role in the declining rate of homeownership in recent years, so has the weakness of the overall economy. Buying a home is the most important purchase and largest financial commitment most people make during their lives. For most Americans, it is hard to feel secure enough to make such a commitment
when the economy is growing slowly and they see nearly one in five workers underemployed, that is, unemployed or employed part time but willing to work full time,” it added. “Declining home ownership rates suggest some Americans are beginning to doubt that home ownership remains part of the American dream, or at least, an attainable part of it. From an economic perspective, US economic growth needs to be much stronger than it has been in order to achieve the hiring necessary to get unemployment rates to the normal levels of the past. Tis doesn’t seem likely as long as housing activity remains relatively moribund and home ownership rates are declining,” Gallup concluded.
8 I CITYSCAPE I JUNE 2012
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