The UK has some of the highest property prices in the world, with prices rising by about 10% a year for the last decade. However the credit-crunch of 2008 is having a negative effect on house prices at the moment and they are estimated to be going down by about 6% a year.

But despite this demand will always outsrip supply over the long term so expect prices to start going up again in the not-too distant future. 

Price of Property

There are two main reasons why property in the UK has always been so expensive. The first is that Britain is a small island with a huge population. Just 224,820 square kilometers holds a population of over 60,000,000 people, making it one of the most densely populated places on the planet, this means that there are simply not enough houses to go around, particularly in the South East of the country around London.

The second reason is that a lot of British people (Brits) have an obsession with buying and selling property, as a means of making money. These entrepreneurs are known as Britain’s ‘buy-to-let’ investors, and they are largely responsible for pushing up prices by turning up in new areas and buying all the available property that they can find, and then renting them out until the prices have risen. This recently happened in Northern Ireland, where prices rose by 48% in one year, before falling again in 2008.

Renting houses and apartments

This has created a situation in the UK where there are lots of houses and apartments to rent, but homes for sale, especially in popular places such as London, Manchester and Edinburgh, are too expensive for most people to buy. The British government is trying to fix this problem by promising to build over 3,000,000 new homes by 2020, but most people think that house prices in the UK will continue to go up anyway, because quite simply there will always be more people needing a place to live than afforable housing.

So what this shows us is that if you have the money, and choose to buy in the UK, you have a very good chance of seeing that money grow by around 10% a year over the long term, although there is obviously no guarantee. This is quite popular with parents of students, who choose to invest in a small apartment for their children, instead of paying their rent, and then selling the property after they have completed the degree (usually about 3 years later) for a nice profit.

Benefits

But also consider the benefits of renting. It is easier and much faster to rent a property than to buy one. The legal process of buying a house in the UK can take a long time and sometimes the sale falls through. Being a ‘tenant’ (person who rents a property) means that you are not responsible for fixing anything that goes wrong in the house. If the hot water doesn’t work one day, for example, you simply call the landlord and tell them, they must fix it and pay for it by law.

Another thing to consider is that most rentals in the UK are already furnished with beds, cookers, fridges etc. In comparison, the custom in the UK is for houses to be sold completely unfurnished. You should consider the benefits of walking into a furnished place and never underestimate how much there would be to buy and do when you buy a place!

Renting also gives you more flexibility to move easily until you find the right place to settle down. It is quite normal for tenant’s contracts (known as The Assured Shorthold Tenancy (AST) Agreement) to last between 6 months to 1 year, so this allows you to stay mobile until you find what is right for you. 

So there you have it, if you have the money and are willing to take responsibility for the day to day maintenance of a house, then buying a place in the UK is a good investment, but if you want to be flexible and time is important to you, then the simplicity and convenience of renting is a much better option.  If you like the idea of renting or buying a house or a flat then have a look at our listings in  "Find a..".

By John Hillman

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USEFUL WORDS

Renting
letting agent = a person whose job it is to rent houses or flats
landlord = a person or company from whom you rent a house or flat
tenant = a person who pays rent for a room, house or flat
tenancy agreement = a period of time which you agree to rent a house or flat for
references = letters written by your employer and bank giving information about your character and ability to pay your rent
deposit = a sum of money paid when you move into a house or flat, which is returned to you if there is no damage at the end of the tenancy agreement
inventory = a written list of all the objects, furniture etc. in a house or flat
notice period = the period of time within which you need to inform your landlord if you wish to leave your accommodation (or vice versa)
bills

Buying
estate agent = a person whose job is to sell houses and land
mortgage = a legal agreement by which a bank or similar organisation lends you money to buy a house
freehold = owning a building or a piece of land for a period of time that is not limited
leasehold = the right to use a building or a piece of land for a fixed period of time according to a lease agreement
the purchase price = the price a house is bought for
survey = an examination of the condition of a house by a professional
Stamp Duty = a tax which is payable on properties costing more than £125,000, at least 1% of the purchase price
land registry fee = a payment made to the government office which keeps records of areas of land and who owns them
local authority search = a check made against any building plans which may affect the property you would like to buy
removal expenses = costs involved in moving your furniture and other belongings to your new house
make / put in an offer = suggest the price you are willing to pay for the property to the seller
conveyancing = the legal process of moving property from one owner to another
deposit = a sum of money which is given as the first part of your payment (usually at least 10% of the property price)
exchange (contracts) = signing a contract with the person that you are buying from, the deposit is also paid at this stage
completion = the formal act of completing the purchase of a property, the final balance of the cost is paid

HOUSE & HOME  IDIOMS

We got on like a house on fire = very well
He can chat until the cows come home = for a long time
I told him a few home truths = true but unpleasant facts about someone
It took a few days for the news to really hit home = have a strong effect on someone
Her last song brought the house down = made everyone cheer
It was nothing to write home about = ordinary  / not especially good
The lights are on but there’s no-one home = someone is stupid, not thinking or not paying attention