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Low level interest rates and falling unemployment are stimulating demand and there remains a shortage of properties available for sale, especially in the south of England. This is adding to the upward pressure on prices.
Any fears of a serious drop in house prices are unfounded as there is a difference between the housing market of the late 80's. The Base Rate doubled from 7.5% to 15% when Government tried to maintain sterling's place in the ERM. Interest rates are highly unlikely to double in the next five years, so it is therefore unlikely that the interest rate pain that was inflicted on the borrowers in the 90's will be repeated. And today's borrowers have more protection against increases in interest rates than in the past such as discounted, fixed or capped rates. Such deal were far less common in the 90's.
The other key factor affecting house prices is unemployment. Back in 1989 unemployment doubled from 5.3% to 9.9% within two years, whereas todays current employment in the UK is at record highs and unemployment is at a 25 year low. Be assured that property is one of the safest investments you can make today and with the help of Fuse Invest you can start to buld a successful property portfolio immediately.
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