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buying, selling and renting a home

Another property bubble…or is it?

A new year but the headlines seem to be the same as ever in recent times, "property prices are going up again". Many people within the industry are left scratching their heads at the rate of increase, it would suggest that another bubble is building…or is it?

It may be time to concede that home ownership is on the decline in this country because plain and simply people cannot afford to buy.

Looking at home ownership rates across the globe compared to the UK makes for interesting reading.

In the UK 64% of households actually own their home, this is similar to the US at 65.4% and Canada at 68.4%. Look around Europe and it's a very different story with wild variations. Germany’s rate comes in at just 43% ownership whereas Italy is 82% and Spain 78%.

It would suggest that at 64% there is plenty of room for a reduction in this number if that's the way we're heading. Renting a property is becoming not a choice but a necessity for many and is not restricted to first time buyers, in fact we have many families that need to upsize but simply cannot afford to buy.

As things stand home ownership is moving further away for many people, so where do we go from here?

I think two ways, firstly and ideally the country starts to build more houses, wage inflation increases, liquidity returns to the market and, with increased stock levels, prices will flatten out somewhat providing a stable and sustainable market.

The second route is continued price increases and with a shortage of property for sale, and an increase in population levels in general this could really impact on the home ownership number of 64%, we may not see quite a decline to Germany levels at 43% but somewhere in between as the shift towards a majority nation of renters develops.