Though the UK real estate recovery starter in 2009, now with the third quarter 2010, it has lost all the steam that it had gathered earlier. This fact has been reported by the major housing agencies in UK. According to Halifax, the average house prices have been quite down for the in September 2010. The prices are also down 3.6% in September from the last month. The average UK real estate for sale is 162,096 pounds.
Most money lenders for the market also expect that the prices of the for sale will fall in 2011. The moneylenders believe that major spending cuts are inevitable in the budget and this will also make it difficult to obtain the home loans for the housing. In May 2010, the Conservative party has advised significant reductions in the budget that will decrease the budget deficit to the tune of USD 127 billion.
With half a million public sector jobs on the block, the unemployment rate is likely to grow and the spending likely to be cut. This will also affect the home loans and the for sale properties as many people won’t be able to afford the homes. The retirement age for the public sector employees will be increased to 66. This is one of the largest budget cuts that have been implemented in decades. This will also lead to lower wages in the private sector. All of this will have a negative impact on the UK real estate.
The government is hoping that these measures will eliminate the deficit by 2015 and make the economy more stable. Currently all the measures that will be implemented by the government are strictly under a lot of debate.
The UK rentals are low in comparison to some of the European Union countries and the international rentals. The gross average UK rentals are quite low and hover around 4%. Even in central London, the average UK rentals hover around 4.6%. The rental income for the non residents is a flat20% unless they have taken some very specific steps to counter the problem. With a number of allowable deductions, the taxation can be as low as 9%. The capital gains tax is valued at the progressive rates of 18% – 28%.