House prices have risen dramatically throughout the country. With homeowners also put under the stress and strain of increased interest rates and stamp duty, the property market has slowed considerably. But what does this mean for the removals industry? And could this ‘property bubble’ be about to burst?
The steady influx of overseas buyers in London has already driven up property prices throughout the country – something we’ve heard enough of in the press recently. The increased demand and lack of supply of affordable homes, particularly those suited to first time buyers, has also started to pose a massive problem to the property market, as high demand also drives up housing prices. But, if things weren’t already hard enough for homeowners or first time buyers to work their way through the property ladder, Lloyds Banking Group, the largest lender in the UK has placed a cap on its mortgages in an attempt to address the “inflationary pressures” of the UK market. As a result, loans over £500,000 or four times the income of whoever is taking out the mortgage will be severely limited. Although this will mainly impact those purchasing higher end properties, there looks to be further restrictions applied to other price brackets later on in the year.
Stamp duty also appears to be choking the removals industry. The Home Owners Alliance has found that since the mid-90s, stamp duty has risen more than seven times the rate of inflation, with the typical amount paid today standing at £6000. With such an amount added to the money already paid for a house or a flat, it is no surprise that many are struggling to make a move.
So, what does this mean for removals? Very simply, it’s bad news. A static housing market means that there are limited removals jobs available. Not to mention, with rising costs of house prices, clients are going to be unwilling to pay top dollar prices for removals. If the housing bubble is to burst, however, the Bank of England will be required to hold the pin. With the risk of following a similar pattern to the pre-credit crunch property boom of 2007, they should arguably do it sooner rather than later.