'What'll happen to house prices?' poll results/discussion

Former_MSE_Lawrence · 20 October 2008 at 12:21PM

Poll between 20-28 Oct 2008:

What’ll happen to house prices?

Annual UK house prices drops of over 10% have been reported. But where will they go next?

What do you think’ll happen to UK house prices over the next 12 months?

A. Increase over 20%. 1% (118 votes)
B. Increase 10-20%. 1% (128 votes)
C. Increase 5-10%. 2% (194 votes)
D. Increase 2-5%. 3% (360 votes)
E. No real change. 8% (937 votes)
F. Decrease 2-5%. 12% (1412 votes)
G. Decrease 5-10%. 23% (2730 votes)
H. Decrease 10-20% (smaller crash). 26% (3054 votes)
I. Decrease over 20% (crash). 19% (2247 votes)
J. I really have no idea. 4% (520 votes)

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

torbrex · 20 October 2008 at 1:59PM

I voted but I really dont care, I have never kept track of what my house is worth as I have no intention of selling it. I know what I paid for it in 1992 and at the moment that is still the value in my minds eye.

Thulbourn · 20 October 2008 at 6:27PM

Prices of things go up and prices of things go down... surely with such a huge increase in the price of houses over the past few years how can you say a 20% decrease is a crash? The reason people do is because:

1. People (unlike the previous very sensible posting) somehow seem to have associated the value of their house with the value of their wealth. This is not correct, I think the value of your house is meaningless apart from the relative steps between the price of houses - in fact having smaller steps makes it easier for people to get on and move up the chain.

2. The whole western economy seems to be tied to the basis that house prices will rise and rise inexorably. Anybody else share my 'emporer's new clothes' view of this ridiculous basis for an economy? Perhaps we'll look back in years to come and see the whole housing market bubble as the equivalent of the 'tulipomania' that seized the Netherlands back in the way distance past, or South Sea mania, or the internet bubble.. I guess the question is what will the next bubble be?!

Unfortunately there are going to be a lot of people who will be hurt by the bubble bursting, many of them innocent bystanders who just want to own their own house.

JF77 · 20 October 2008 at 8:41PM

I can't believe the number of people voting for an increase including 9 people who have voted for a 20% increase, whats that all about?

buxtonrabbitgreen · 20 October 2008 at 8:50PM

Lower house prices might make it easier for new buyers to buy a house, but only if affordable mortgages are available. I'm another one not going anywhere so house prices are only relevant in so far as what my children think they will inherit. That's if I dont cash in and buy a caravan.

carolt · 21 October 2008 at 9:14AM

Sure your children would rather inherit less but be able to afford their own house themselves. Sure they'd welcome falling prices.

SandC · 21 October 2008 at 10:40AM

My area as a whole is not expensive compared to many others. I've seen prices coming down on larger properties but nothing much happening to your basic 2 bed terrace. What is happening is the apartments that shot up are not selling. Flats never were the popular choice in this area, not when being historically manufacturing city there are thousands of terraces. People would have rather bought a house than a flat (and the flats used to be price at more than the houses).

The gap between first time buyer type properties and family properties was becoming quite vast, I believe in my area at least it is not the lower end homes which will decrease much but the higher end.

ceridwen · 21 October 2008 at 7:36PM

Well....considering the incredible amount my tiny little terrace house is worth and how the only household that could buy it at the moment is a 2 person household and both of them on national average income (in my low-paid part of the country) - then I cant see how house prices can do anything other than "crash" drastically.

Its a bit swings and roundabouts as to what I personally think even about house prices going down - though, obviously, as my father has already pointed out to me "The gap between the value of your house and the house you actually want will be decreasing now - and improves the chance of getting the house you actually want." Very true. It also gives people the chance to buy something in the first place possibly. I know how I had to struggle like mad to buy something - single/low salary/dear area and it was one heck of a struggle. The struggle didnt even stop when I managed to buy the damn place in the end - as what I managed to get was such an almighty dump - as I couldnt possibly manage a decent place - so I can certainly sympathise with people struggling now.

I think also one has to bear in mind that when my generation bought our homes - whether on time or after one heck of a delay (as in my case) we knew that if the worst came to the worst and we got made redundant and suffered a spell of unemployment as a result - then our mortgages would be covered by the D.H.S.S. (as was) - provided we had had the foresight to make sure our mortgage was a repayment one. Reason - all the mortgage interest would be covered right from the outset and whatever the size of the mortgage. That helped a lot on the peace of mind front. I personally never needed to "cash in" on that - as I got shot of that mortgage just as fast as I possibly could - quite a few years early in the event. However, if my equivalent bought a home now they wouldnt have that "peace of mind" factor I had - as theres been huge cuts since then in what the D.W.P. (as now is) will cover mortgage-wise - so they are going to be MUCH MUCH warier than I was of buying a home even if they have very much the same financial situation as middle-aged me had. Thus they will sit there and hang on and hang on for house prices to come down before they buy - if they can manage to buy at all (even if they are a couple).

My difficulties in my generation came from buying as a single person - there wouldnt have been the slightest scrap of difficulty buying if I had been married - we would have gone out together and bought one the instant we decided to. I only had the - MAJOR - problem I had because I was single. These days I would anticipate even married couples would have an equivalent struggle to what I had - and maybe wouldnt even manage to "win" that struggle eventually.

dianemaytime · 21 October 2008 at 10:36PM

House prices should stabilise in the next three months or so because unilke America we have a housing shortage in this country. The huge increases of the last two years was fuelled by unscrupulous lenders and could not be sustained but by early next year the Banks will be lending again, albeit with more care, and the Housing market will get started again with proper controls and with more modest increases. This will help unemployment because 90% of the population is directly or indirectly linked to the construction industry so the UK will begin to see modest growth by the end of 2009.

ceridwen · 22 October 2008 at 6:47AM

But DO we have a housing shortage actually? By the time one takes into account the amount of property left empty for some time for one reason or another on the one hand and the number of second homes on the other hand - I believe I read somewhere that if all homes were occupied and no-one had a second home as well then there wouldnt be a shortage. Ergo - there isnt a shortage. I think it is only perceived that we have a shortage - and thus the laws of supply and demand inflate house prices - because some people have more than their fair share of housing - thus others cant get their share.

wearewolves_2 · 22 October 2008 at 8:21AM

The notion of a housing shortage is one of those accepted wisdoms that has never been proved. In a shrinking economy the pressure on housing will diminish greatly and lets be honest, we are a long way from the days where 2 families were sharing small terraced houses. Normal supply and demand economic rules would see a major shift downwards in house prices over the next 18 months (as stated by the Nationwide chief exec). The only brake on this will be whether owners are willing to sit tight and ride it out in the hope they can get more for their home in 2-3 years time. This is fine if you have that luxury but if you have to move (for instance having lost your job in the downturn) then realism will have to be the order of the day. City centre flats are the exception in my view and they are doomed in all scenarios!! I saw details of a Leeds city centre flat being sold at a loss of about £225,000 for £71,000 and I can see why the owner has done that. There is a real danger of there being no market whatsover for some recent and current developments rendering them effectively worthless.

'What'll happen to house prices?' poll results/discussion

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