Why are property prices falling in the UK and rising in the US?

Under the heading ‘Need to Know: A tale of two housing markets’ the Financial Times has examined why property prices are falling in the UK and rising in the US.

The article can be read here (subscription may be necessary) and believes ‘Part of the explanation lies in the structure and operation of the mortgage market and its effect on the behaviour of owner-occupiers and potential buyers.’

Going on to say that whilst ‘ In the UK, most borrowers take out mortgages where rates are fixed for two, three or five years. Though a capital repayment loan typically takes between 25 and 35 years to pay off, they must refinance every few years when these fixed rates expire.’ but ‘US mortgage borrowers taking out a 30-year loan can lock in their rate over the full term of the loan, with no need to remortgage if they keep up their payments’

SEARCH

YOU MAY ALSO LIKE

Nationwide’s latest report

Figures from Nationwide showed house prices were largely unchanged in June following a bumper performance in May....

Off-Plan Buyers Drop

Higher interest rates have caused off-plan home sales to tumble in the UK, prompting the nation’s housebuilders to...

CATEGORIES
SOCIAL
Twitter feed is not available at the moment.

0 Comments

Submit a Comment