It’s well known that in UK real estate, local real estate markets are falling because individuals and real estate agents may have inflated views of property values. Prices for homes for sale are on the down trend because sales are at about 50% of the norm. Another factor that’s contributing to this growing downward tendency is that many sellers tend to have an inflated idea of what their properties are worth and for this reason, they reject larger numbers of offers. This is caused by a discrepancy that can range up to 30% between buyer and seller. A seller who’s offering £100,000 for a UK Real Estate property and receives offers in the range of £70,000 is highly likely to reject them.

The Sellers are to Blame

The recent decline, which is occurring after over 10 years of rising prices, makes it difficult for agents, real estate brokers and financial institutions to convince owners that the values to their properties are less than they were a year ago. In fact, property values in the present market can decline as much as 20% annually. One expert in real estate services places the blame firmly on the sellers: “As a result they [sellers] are unwilling to accept agent advice on appropriate asking prices or offers. Consequently, many properties are withdrawn from the market or remain unsold for long periods, producing an unprecedented low number of transactions. Unless their [sellers] properties are absolutely outstanding it is essential that they [sellers] adopt a realistic attitude and listen to advice if they want to achieve a sale.”

Even High Dollar Properties Suffer

Another alarming aspect of this trend of UK Real Estate is that even high-end properties designated as “super prime” are not immune. Super prime refers to a property valued above ten million pounds. Foreign investment helps slow this process, but any real estate agent will tell you values are still moving lower. Those who won’t sell at deflated prices rent, but they’re finding rental rates dropping as the supply of rental homes increases.

The Banks and Lenders Are Also At Fault

Add to this the fact that mortgage rates are rising, despite government efforts to support failing banks. Lower interest rates aren’t being passed to borrowers, for example as the Bank of England raised rates by .3%. The banks circle the wagons, each claiming that the rates rise because all the other banks raise their rates. Lloyd’s even raised the Bank of England’s lower rate. Whether or not this is true, it’s still bad news for real estate in the U.K. And it’s even worse news for consumers who are seriously looking to purchase Real Estate.

Utilizing Property Management Companies
If you are not satisfied with the property investment appraisal that investment clubs offer, you can also try your hand at property management companies. The advantage that you will have with such companies is that besides the usual property investing they are also into rental real estate investing. There is some particular risk in rental properties, yet they can reward people greatly. Both residential and commercial real estate are parts of rental investments.

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