UK housing market – perfect time to invest?

UK mortgage approvals have shown their lowest increases in 6 months. Rumours are now circulating that the UK housing market has nearly reached it’s peak and many homeowners are on the limit of the amounts of credit they can safely handle.

At the end of 2006, research showed that the UK housing market was buoyant and not showing any signs of slowing down. However, the Bank of England raised it’s base rate in January 2007, throwing a lot of people off their guard. With at least one more rise predicted, and most analysts believing this year holds another 2 rate rises, the after-effects are starting to hit a lot of people causing the housing bubble to stagnate.

The UK had 113,000 new mortgage approvals in December 2006. This was a decrease of 12% over November, which showed 129,000 mortgage approvals – a 3 year high. In the UK, new mortgage approvals are used as an indicator to predict where the housing market will be moving in the coming months.

With a softer housing market predicted in 2007, and some people over-stretched and being forced either into bankruptcy or downsizing, now could be the perfect time to invest in the British housing market. A dirge of properties are appearing on the market – and many are not selling due to investor concerns over the market, meaning silly offers can become reality and excellent properties can be picked up at good prices. In the long-term, the housing market is expected to rise again, leaving investors pocketing excellent returns.

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