Mumbai: This a good time to buy a house in the UK: the slowdown in the global economy has made residential properties cheaper.
Prices are falling by about one percent month-on-month and it’s estimated that overall there would be a 12 percent decrease in prices this year. Next year there could be a further slide of 6 to 8 percent.
A report by JLLM says the UP property market will pick up again only towards the end of 2010. That's when prices could rise by 8 to 9 percent per annum. The average rate of return on residential property in the UK is over 10 percent and experts say the returns will continue to remain optimistic.
"Our projection between 2010 to 2013, is the highest price rate growth return, by an average of 8 to 9% per annum and then, in the longer term, probably follow an average of about 6% per annum," says James Thomas, Head-UK Residential, Jones Lang LaSalle.
According to the report, the number of Indians buying houses in the UK, is set to increase hugely, by 2017. The report says Indian residents could spend about 10-15 billion pounds on UK residential property, over that period. While currently, this figure is over 80 times lower.
"When you are buying property in London, you are not having to finance the construction upfront. In India I understand, that that's the case. In the UK, you put deposit down, which might be 20 or 30%, & then the balance is through debt, which is payable on completion. So the drawer on the financial capital of the purchaser is less to buy in the UK, than perhaps it would be elsewhere," says Paul Vallone, MD, Berkeley Homes Ltd.
Currently, property prices in cities like London and Birmingham, are between 20 to 60 percent lower than in major Indian cities, like Mumbai and Delhi. With prices falling further, it will probably be easier to afford a house in the UK, than within the country, where prices in some pockets, still remain bullish, despite the slump in the property market.