PROPERTY VALUE SPLIT WIDER THAN GRAND CANYON

When buying a property the most sought after thing is the location of the property. In south east near the capital the property prices have always been high and will continue to be high as it is near the economic hub of the country. This disparity exists purely because of the greater demand for properties in the south in comparison with the lower demand in the north.

However, you would expect that when there is a rise in UK house prices it would affect all areas in a very similar ratio. To the contrary in the North of the country and in Wales, the average house price rose by 1% whereas in the south east it rose by 7.6%.

Throughout the country the disparity is so large that they range of average house prices goes from £100,000 in some areas to £500,000 in others. In some case the average annual rate of increase of house prices in some areas is over 10 times greater than in others purely because of its location and these figure continue to spread further.

A reason for this could possibly be that cities are often home to an immense buy to let market and hence the demand for houses is greater than places outside of London. Furthermore, when it comes to properties for investment the cities usually tend to give the greatest return on investment as supported by the average house price increase in the city and therefore this also generates a lot of demand.

CRIPPLED WITH DEBT BEFORE ADULTHOOD?

In the UK it appears that year after year the number of young adults leaving college and university and entering the world of employment are facing debts that they must repay for extremely long periods of time sometimes even stretching until their very final pay check. A charity has commented that more and more young adults are facing high levels of debts after borrowing from banks, pay-day lenders, and family members.

A survey quoted that people aged 17 to 24 had over 100,000 debt issues in just 2014, which is over 20% above the value in 2013. This rapid increase in this value indicates how every year more and more are becoming crippled by debt. It is suggested that this may have been caused by the increasing numbers of students taking formal loans in addition to their student loans hence creating more problems.

Every generation in UK seems to be starting their adult lives with new, higher levels of debt. With the cost of tuition fees at a high of £9000, it has become a choice between a university degree along with debts or lesser qualifications but no monetary commitments.

It comes to situations where some students are forced to make do with the bare minimum, such  as: having 'to use candles as lights,' simply because with other living it becomes basically impossible.

Due to these high levels of debt that these young adults find themselves in they are often forced to take out loans with pay-day lenders. This often results in very high interest rates and therefore, students struggle to repay this as well on top of the debts they already have.

For more information:
http://www.bbc.co.uk/news/business-34346698

For debt management skills:
http://www.publications.parliament.uk/pa/cm201012/cmselect/cmbis/1649/1649.pdf

INTEREST RATES LOWER THAN LOW?

As defined by economic theory when there is positive economic growth in the economy, like the UK has now, there should be high rates of inflation also. However in the UK's case, it appears that the economy an opposite effect has been had as inflation currently stands at 0%, hence indicating that growth is being driven by other factors.

The Bank of England introduced a historic low interest rate of 0.5% six years and this rate has stood since. This figure was introduced during the global recessionary period as a way of stimulating growth in the economy through greater confidence and consumption. This was because with a low interest rate, borrowing also became cheaper and hence it was believed that this would increase consumption of highly priced goods and although this occurred, indicated by the great demand for houses and their rapid rise in prices, inflation still remained low.

As a consequence of this the Bank of England is now contemplating whether to reduce the interest rate further in order to stimulate growth in the same way as they did a few years ago. Speculators are also say that it is possible that the Bank of England make their interest rate negative and this in turn will banks will charge people to store money in their banks and hence provide a greater urge to spend.

There seems to be more reason for this further drop in the interest rates as the UK is currently in the longest every recessionary period in UK's economic history. Economists predict that surveys carried on the manufacturing and construction industry's output suggest that growth could possibly slowdown in the months to come and therefore it is unlikely that inflation is going to rise and so a lower inflation rate would be the best solution out of this economic predicament.

For more information visit:
http://www.bbc.co.uk/news/business-34291815