Archived Articles

Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

Global Real Estate Project
News Index

Directories
  Int'l Realty
  US Realty

After many years of remarkable increase in the residential property prices and property investment returns in the United Kingdom*, the last 12 months saw in fact a zero growth (0.9 percent). The big gains in the capital city of London (more than 8 percent) in 2000 were coupled with net losses in less developed northern parts of the country. The whole residential real estate market in the UK is on the road of major restructuring and it is believed that in the next couple of decades there will be a significant shift from the traditional community style townhouse properties to more single-family oriented detached houses in the suburb areas.

The residential real estate market in the UK may be characterized by its big price disparities given the relatively small size of the country and the high population density. On the top of the market is situated London with an average house price of $240 000**. On the bottom are Scotland and Wales with an average price of $80 000. In London itself the properties' prices also vary depending on the exact location. On the northern bank of river Thames the areas are traditionally considered to be far more prestigious so the properties there could reach $3000-4000 per sq.meter***. Accordingly, on the southern bank of the river which is traditionally linked with higher crime rates and lower income population, the prices may fall below the mark of $1500/sq.meter.

There are different factors that influence the residential market in the UK. On the "bull" side is the fact that the population in the country is changing rapidly its way of life and more and more people are considering moving from the community style townhouses (these landmarks of old Britain) to suburban areas with their single-family houses. Such a trend means that the construction industry in UK will have plenty of work in the decades ahead. Millions of new houses will mean millions of new mortgages, higher interest rates and higher average residential prices in the country as a whole****. The lower unemployment in the UK and the need of thousands of high skilled professionals will lead to a new wave of immigration. This new labor force with good salaries will strengthen the demand side and ultimately will move up the residential market.

On the "bear" side of the market stands the fast that the people of the UK as the population of many other developed countries is rapidly aging. That means that the mobility of the population as a whole will diminish in the next decades and more and more people will decide not to move, or worse, they will decide to move to warmer European countries such as Spain, Portugal or Greece. This trend of aging and moving away will mean less demand on the real estate market, lower interest rates and will ultimately lower house prices.

Which of these contradictory trends would prevail in a long term (in the next 2-3 decades) now is difficult to predict. In a short term (2-3 years) predictions are that the interest rates will go down, the demand side will get stronger and if there isn't an unexpected economic downturn the prices will soon beat another record. Another positive sign in middle term will be the entering of the UK into the Eurozone, which will lead to a new substantial reduction of the interest rates.

* - In the late 90s the average annual price of the houses in the country progressed with almost 10 percent.

** - For 100 sq.meter (1000 sq.feet) property.

*** - In some particularly attractive areas of Northern London the prices may exceed $10 000/sq.meter. Among the major cities in the world London is the second most expensive city just after Tokyo.

**** - The average price of a house of 100 sq.meters in the beginning of 2001 was $130 000.

--------------------

See also the directory of companies providing real estate services in, and general real estate information of United Kingdom.