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**MSE Wendy** · 06-04-2009, 5:51 PM

Poll between 06-14 April 09.

What’ll happen to house prices?

Over the last year according to Nationwide house prices have dropped 15.7% while Halifax says 17.5% Yet in the last month Nationwide has reported a rise of 0.9%, compared to Halifax's 1.9% drop.

Sentiment is a crucial part of house prices e.g. when people think they’ll drop, many hold off from buying, meaning less demand and prices do drop.

So what do you think will happen to UK house prices over the next 12 months?

A. Increase over 20%. 1% (114 votes)
B. Increase 10-20%. 2% (163 votes)
C. Increase 5-10%. 6% (592 votes)
D. Increase 2-5%. 18% (1848 votes)
E. No real change. 21% (2167 votes)
F. Decrease 2-5%. 14% (1515 votes)
G. Decrease 5-10%. 17% (1753 votes)
H. Decrease 10-20% (smaller crash). 11% (1187 votes)
I. Decrease over 20% (crash). 6% (671 votes)
J. I really have no idea. 5% (475 votes)

Voting has now closed, but you can still click 'post reply to discuss below. Thanks

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Gorgeous George · 06-04-2009, 6:42 PM

I think the rate of change varies throughout different regions of the UK. In areas of high turnover (e.g., London) the rate of change is greatest and these areas will reach the bottom first. Other areas will be slower to fall but will continue to fall when the faster falling places start to recover. However, they may not fall as far as confidence returns once the press start reporting a recovery.

I think prices have to fall by between 40% and 50% in total so there is a long way to go. Once they reach bottom, future rises will be moreorless in line with inflation. Interest rates will no longer determine house prices.

It is different this time. In the late 80s/early 90s the crash was caused by interest rate movements. The extremely crude policy of using interest rates to control inflation will have to be abandoned and a more long term approach through controlling the money supply will be employed.

FTBer homes cannot cost more than 3 to 4 x average FTB salary.

GG

lostinrates · 06-04-2009, 6:47 PM

I'm glad some people feel positive enough that the huge economic mess we are in will dealt with enough within the next year to vote for an increase in prices.

I think they are probably wrong, but there you go.

Cleaver · 06-04-2009, 6:48 PM

I'm going to make a prediction at what the graph of this poll may look like once everyone on this board has voted:

Anyway, I'm going for H if we're talking 12 months from now.

mewbie · 06-04-2009, 6:49 PM

Just saying what I think will happen carries very little weight, I am just a poster after all. So I'd rather say what my gleaned 'knowledge' from various sources is before stating the obvious.

Biggest bubble in the world. 18 months behind the States where they are still dropping.
Worst placed country in world to see out recession.
Tax bombshell AND public spending cuts coming up your street soon.
Unemployment forecast to hit 3.5 million in a year.

Yep, it's crash all the way as far as I can see.

lostinrates · 06-04-2009, 6:54 PM

Quote:

Originally Posted by Cleaver

I'm going to make a prediction at what the graph of this poll may look like once everyone on this board has voted:
.

Maybe, but right now you are way out.

Which as well as making me happy, makes me kind of worry.

I'm not normally so sour, but I can't help wondering if these are the people who think they will be ok without doing their seatbelts up, or the ones who don't protect themselves against STIs. I bet they all have safe jobs too.

I think I need a cup of tea, I'm being very un-me ish.

Cleaver · 06-04-2009, 6:59 PM

Quote:

Originally Posted by lostinrates

Maybe, but right now you are way out.

Which as well as making me happy, makes me kind of worry.

I'm not normally so sour, but I can't help wondering if these are the people who think they will be ok without doing their seatbelts up, or the ones who don't protect themselves against STIs.

I think I need a cup of tea, I'm being very un-me ish.

I suppose that the general public will see what's going on as a 'blip'. I wouldn't be arrogant enough to suggest that this is because of ignorance or anything, I think it's probably because most people don't 'join the dots' as Mewbie as done above.

Can't comment on the STIs, but maybe Mr Broderick will be about later to comment. Seems to be a subject I imagine to be 'up his alley' (no pun intended).

JonnyBravo · 06-04-2009, 7:08 PM

Yep I'm with the mighty Cleaver. H. 10-20%

ad9898 · 06-04-2009, 7:17 PM

I would expect H, to be the answer, however this time around sentiment is not crucial, prices got so out of hand that financial institutions collapsed (I know, I know it started in America.

), the banks will not lend to everyone, regardless of if people want to buy.

rickbonar · 06-04-2009, 9:56 PM

With businesses going bust at a rate quicker than in living memory, people are being laid off and redundant as a result.
Wages are not going up and banks aren't lending ... in particular to house buyers.

Even the banks and building societies that are lending are sticking with the 3 to 4 times your annual income rule (really what they should have done from word go)... fine if you're a banker, lawyer, doctor or politician: but if you're NOT already a millionaire and in an average job... the average wage being around £24,000 that makes you if you can get a mortgage only capable of getting a maximum of around £95,000...
This might just buy you a garage or a decent caravan.

Most sellers won't drop their prices as they’re gambling the house price saga is just a blip but I fear prices have got a long way to drop yet. Buyers don’t want to buy something that is dropping in value and due to drop as much as half again.

ad44downey · 06-04-2009, 10:01 PM

Quote:

Originally Posted by rickbonar

With businesses going bust at a rate quicker than in living memory, people are being laid off and redundant as a result.
Wages are not going up and banks aren't lending ... in particular to house buyers.

Even the banks and building societies that are lending are sticking with the 3 to 4 times your annual income rule (really what they should have done from word go)... fine if you're a banker, lawyer, doctor or politician: but if you're NOT already a millionaire and in an average job... the average wage being around £24,000 that makes you if you can get a mortgage only capable of getting a maximum of around £95,000...
This might just buy you a garage or a decent caravan.

Most sellers won't drop their prices as they’re gambling the house price saga is just a blip but I fear prices have got a long way to drop yet. Buyers don’t want to buy something that is dropping in value and due to drop as much as half again.

So true. It has all the hallmarks of a bull trap. I wonder how many people are going to get caught out by it.........

scousethife · 06-04-2009, 10:07 PM

Well with banks opening up more mortgages useing bailout money, I think they are going to level off. They wont go up for years and years now.

ad9898 · 06-04-2009, 10:18 PM

Quote:

Originally Posted by scousethife

Well with banks opening up more mortgages useing bailout money, I think they are going to level off. They wont go up for years and years now.

The irony of this is the government are borrowing money that we, the taxpayer will have to pay back, to give to banks so they can then lend it out to...... guess who.... us the taxpayer,

, a FTB'r taking out a mortgage now is going to have to pay the same money back twice, once to the bank, and secondly to the government in your taxes.

And all this on an asset that is falling in price..... madness I say.

ManAtHome · 06-04-2009, 10:19 PM

Depends more on the wholesale (pesky foreigners) loans - weren't they £6-700 billion?

Davesnave · 06-04-2009, 10:21 PM

The results thus far look very interesting. If they stay as they are, they'll be even more interesting in a few years time. People will look back at evidence of public sentiment like this and say: "After more than a year of living the Noughties Crisis, how was it that so many still called it so wrong?"

And, with a spread like that, a large percentage must be wrong, no matter which way things go.

Davesnave · 06-04-2009, 10:27 PM

Quote:

Originally Posted by lostinrates

I'm not normally so sour, but I can't help wondering if these are the people who think they will be ok without doing their seatbelts up, or the ones who don't protect themselves against STIs.

.....As long as they have no defence against STRs!

<Exits making noise like Hannibal Lecter, smacking his lips>

(Sorry, couldn't resist.)

Dan: · 06-04-2009, 10:28 PM

The only true answer is J - no idea. It is most likely that anyone selecting another option would have a VI one way or another, hence the mixed results.

teddyco · 06-04-2009, 10:30 PM

I will guess that house prices will drop another 25% by Spring of 2010.

Dan: · 06-04-2009, 10:32 PM

Quote:

Originally Posted by teddyco

I will guess that house prices will drop another 25% by Spring of 2010.

That means your looking at least a 2% drop every month to get there. I can't see it myself.

oscar52 · 06-04-2009, 10:43 PM

I can see a few more quid coming off yet. Even more so with the ideas that the countrys "think (septic

) tank has come out with.

People have gor far less money now than before now, the Government want to raise taxes (meaning even less money) People simply wont be able to afford houses - like many FTBs now. Unless mortgages come back down to 4/5 times earnings rather than the 9/10 now.

The above of course is based on mine (and other people I know) current wages. The avergae salary in the UK is apprently around £24K - I obviouosly dont know many "average" people.