House prices in some of the world’s most sought after locations are starting to dip after a years-long surge, according to Bloomberg. The reasons for this are reported to be a combination of tax changes affecting demand, issues of affordability and tough lending standards. Bloomberg reports that, according to the International Monetary Fund, this could have wider consequences as the world’s wealthy people have been buying homes on multiple continents, implying that a downturn in one country could affect markets negatively elsewhere.
In London, sales volumes are down and, in central London, transactions have fallen by almost 18% since 2014, with some homes losing a third of their value, according to research by estate agent Savills. On 2 August 2018, the Bank of England announced it is increasing the interest rate, from 0.5% to 0.75%, which could impact some mortgage holders. Jon Ostler, CEO of personal finance comparison website finder.com, says: “The UK's average mortgage debt with a variable rate mortgage face paying an extra £17-£18 per month, which adds up to an extra £200 per year or more than £6,000 over the life of a 30-year loan term.”
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