Too fast growth of real estate prices in London can be a threat to the economy

According to experts, in the next five years we should expect the growth of prices for residential property in England in the South East and London. Price growth will significantly outpace the revenue growth, which will create adverse conditions for the majority of young Englishmen, still did not solve their housing problem.

This trend is fraught with danger for the economy of London and the South-East of England brain drain.

The result of the situation, enterprises located in London or the South-Eastern part of England can face a situation of significant labour shortages, as workers will leave their jobs, trying to find a alternative place to live where conditions will be more acceptable and less burdensome.

As a result of a survey conducted by arington of Cluttons, it was found that 72% percent of people believe that property prices in London and the South East of England will grow faster than incomes in the next decade and 35% of respondents believe that they need to buy a house before prices rise even more. In addition, many tenants say it will take at least 8.5 years before they will have the opportunity to buy their own homes. While 72% of people believe that home ownership will provide them with greater security of living conditions. The vast majority of respondents – 80% believe that buying real estate need because it’s a great investment in the future.

Concern about excessively high house prices in London results in the fact that people, not having the opportunity to buy a house in the capital, begin to move to other cities, thereby creating a healthy demand and growth in prices in other cities.

In the study an attempt was made to reveal the emotional factors that underpin the human desire to buy your own home in England. For example, what circumstances underlie the desires of the people. One of the reasons is the establishment of the Union of the couple. Another reason was the expansion of our own space. But the key point derived from purchasing a home in the property, which said 74% of respondents, is personalization.

Thus, the vast majority of people who do not have their own homes, dream about it, but market circumstances yet make those dreams for many and, if the trend growth in property prices in London will continue, it may become a real threat to economic growth in London and other regions where the growth in property prices will passes too quickly.

® Alice Morgan 08.10.2013