2012 saw a decrease in the housing prices by 1%. In UK, property prices have not been affected much in London but the rest of UK is another story entirely. Certain areas of London where there are more foreign that domestic investors show increase in housing rates.

Also, the Government launched property purchase funding in an effort to turn around the economy. The scheme has easy mortgage rates, resulting in lower monthly mortgage payment. Therefore, an increasing number of people are interested in taking advantage of the Government’s gesture.

However, considering the recession, the Government’s stand seems rather odd. There seems to be problems that are not visible at the first look. Read on to know more about these housing problems –

1. Decrease in Jobs- There is a cut in the jobs and that has been one of the major culprits. This has restricted bonuses at the higher end. As a result, the expensive property sector has been affected. This seems to get worse as it progresses.
2. Condition of Banks – The UK Government has a good share in the housing market. It owns retails banks. Therefore, when it improves lending norms, it is actually admitting that the banks are not in a healthy condition and need a shot in their arm to revive. This is possible only through public money. So, if the costs begin to rise, then there can be another crash. To top it all, the rising lending cost has already begun and this is not good at all.
3. Low Chance Of Consistently Low Property Prices – As per the fundamentals, the property prices are still very high, at nearly 20%. But net income has still not increased and the chances of increasing are very few. Therefore, it cannot be expected that the house prices will remain consistent. A decline in prices was predicted for the coming year but chances of that seem to be dwindling as well.

The inflation after the recession shows that it is much more stronger than it was during the last crash. The resiliency is increasing slowly but surely. When inflation goes, as expected in 2013 but then this will result in increase in the interest in property loans and decrease in property rates. It doesn’t help that there is a general bias on the house sales figures being reported. The sample for house sales is getting biased because high number of better houses and low number of average houses.

It is believed that fundamentals have not affected the market’s resilience. In fact, it is the effect of politics. It is however, expected that the prices will be back to fundamentals. This, however, needs time and a lot of arm-twisting the politician. One such complex where the property prices are expected to decline are the Great Tower Bridge Apartments. It is the right time to invest in this place.