Vested interest

Someone who is described as having a vested interest has a positive interest in the outcome of the situation going their way.

There are a number of people that have a vested interest in property prices remaining high:

  • Buy to let investors - These type of investors are mainly concerned with capital appreciation, if house prices did not continue to rise then the negligible or negative yields would make their investment untenable.
  • Estate Agents - They charge a percentage fee based on the sale price of a property: so all the time that prices are high, then their fees are also high. Estate agents also need to have a high level of liquidity in a market in order to have a good level of turnover of properties being bought and sold. If the housing market goes stagnant then their income will greatly reduce. Estate agents may then try to kick start the market in a negative direction just to get turnover and their fees going again.
  • Mortgage providers - All the time prices are high, the mortgages that people need to purchase properties are also high which means a high amount of long term interest and, in some cases, high percentage fees up front based on the value of the mortgage.
  • Government. Increasing house prices enable people to borrow against the increased value of their home and then spend the money thus growing the economy.

There are also a number of people who have a vested interest in property prices returning to normal levels:

  • First Time Buyers - This group of people are unable to purchase property levels at today's current prices and obviously they would like to see a reduction in prices to make them affordable.
  • STR's - These are people that have sold to rent. They are hoping for property prices to reduce in the hope of buying a house for less than they sold their house for when they moved into rented accomodation.

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