Analysis of the British Mortgage Market


On June 23, 2016, the British referendum on the EU unexpectedly favored the exit of the European Union (EU). In a short time, the pound exchange rate hit a new lows of 31 years. However, the drop in sterling exchange rate has greatly enhanced the purchasing power of overseas buyers, especially those from the Middle East and European countries, and inflowed a large amount into the UK real estate market. Coupled with the new Prime Minister Theresa May’s policies, such as: the infrastructure, quantitative easing and interest rates and other stable property market, so that the British house prices rose not fall, so that more overseas buyers flock to the United Kingdom.

1. British housing market supply and demand how?
A: The British are more and less, the real estate in short supply.
Data: Eurostat recently released a set of figures: By 2050, the UK population is projected to reach 77.1 million, overtaking other major European countries, including 74.7 million in Germany and 74.2 million in France. Many European countries, the British population will rise faster than other European countries, rose about 19%!

However, with a land area of 244,100 square kilometers in the UK, the new land resources available for development are extremely limited, so the per capita amount of land owned by the state is very small. Not only that, the British state regulation of land procedures cumbersome, the British rigorous you understand. These objective facts are highlighted in the White Paper on Urban Planning in London by Boris Johnson, the current mayor of London.

According to the statistics of British Real Estate Development Company, after experiencing the hot year of real estate transactions in 2007, the current amount of houses for sale has reached the level of the last period of history. New listings slipped 15% MoM while 1% YoY decline. Judging from the current trend, housing supply will also continue to decline. At the same time, the demand of buyers not only did not decline, but rose in some cities.

2. After the Brexit, the UK recession yet?
A: Economic fundamentals are stable and economic growth is still strong
Data: According to the latest official estimates, despite the uncertainties associated with Brexit in the UK, the UK economy grew more than in the last three months of 2016. According to the National Bureau of Statistics (ONS), the UK’s gross domestic product (GDP) rose from 0.6% to 0.7%, mainly due to the positive performance of the manufacturing sector. As the fifth largest economy in the world, the United Kingdom has a sound legal system and is a European and international commercial trading area. The United Kingdom has no substitute for the centralization and position of the major business and trade organizations in the world.

3. Operating British real estate, how revenue?
A: House appreciation and rental income rose
Data: Buy a house in the UK, spotted two major income opportunities: house value added and when the landlord’s income. Immigration, the influx of overseas students, making the original shortage of housing in the UK market more nervous, prices all the way singing. According to the British real estate network platform data show that London prices rebounded in March and continued a record high property prices rose 1.4% in the single month in March (+ £ 8,656)

The March UK House Price Index mentioned that house prices have risen in all 12 boroughs, where the average asking price in all 34 of London’s entire districts is still below £ 500,000:

Among top performing districts, Greenwich, southeastern London, home prices rose 6.7% annually, reaching an average of £ 477,000.

4. British house quality is good?
A: Strict construction, strong supervision, strong quality. In the UK, we can see a lot of Victoria. The old Georgian houses still stand strong. These 100-year-old houses have become treasures of the localities and are very sought-after.

The British government has always insisted on strong regulation of residential construction, with NHBC 10-year construction guarantee. NHBC was founded in 1936 as the UK’s largest provider of new home insurance. So far, 80% of new homes built each year in the UK have NHBC’s 10-year insurance.

5. How long is the UK property title?
A: Long-term property rights, you deserve the vast majority of UK property is a separate property, which means that the fixed assets belong to you or your heirs until you sell it. The land in the United Kingdom also has a limited useful life, which can last up to 999 years. After the expiration date, you can still spend it on it.


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