Do You Expect House Prices To Increase In Over The Course Of The Next 12 Months?

zag2me

The results so far show 50% each way, that looks like stagnation to me!

manhattan

yes.

seems like sellers wont budge lowering there prices,and buyers are staying away from buying!

everyones being stubborn at the minute! lol

rrwfotr

Well we will see when the number of repo's start hitting the market. With the Uk in a trillion pounds worth of debt is only a matter of time the ticking debt bomb will blow up. We see what happens to all the subborn people then....

Doozergirl

Shame there isn't a third option. I've voted for a rise, but only in line with inflation, so I'm not really expecting anything much to happen at all.

The fact that houses are seen as too expensive can't trigger massive falls. The fact that people have bought and continue to buy at current levels, although in reduced numbers, proves that. Much of the increased movement in the market in the past few years has been from speculators, so maybe these reduced levels of buyers are just normal levels; ie. people who need to move for reasons other than trying to make a profit.

I don't rule out falls, but something unexpected and political needs to trigger them.

EdInvestor

Can you give me a good reason other than specualtion as to why the market has doubled in five years, there is none. Everyone talks about supply and demand...

I'm not sure quite how speculators are supposed to push up prices.
Or are you perhaps referring to BTL investors? It's true that they have come in to replace the FTBs who have been priced out of the bottom end of the market in recent years, which may have prevented prices from falling.

But how would it cause a rise?

I suspect the reason for the rise is that lower interest rates have meant people can afford bigger mortgages. And as people tend to take out as big a mortgage as possible, so there has been an increase in the supply of money chasing a limited number of homes.

Thus prices have tended to rise.

However the big recent increase in the supply of properties (new build city centre flats in particular) probably means we are coming to the end of this, as supply and demand will be in equilibrium.

Overall IMHO we will probably thus see just small inflation-covering rises in the nationwide figures, with some areas and types of property showing bigger rises - and some showing falls.

superscotsman

At one time, a house was regarded as a place to live. Sometime about the 1970s, some people began to regard it as an investment. During the Weimar republic inflation of the mid-to-late 1970s, the house became a hedge against inflation. Not only did the price go up, but if you took out the highest mortgage you could get, the repayments might be a third of your salary to begin with, but with wage inflation in a year or two the repayments would have shrunk to a fifth of your salary. Now we no longer have the high inflation, but the urge to make loadsamoney from one's house is still there. So it's boom and jam from now on, folks. And we're now in a jam. So sit ye tight: ye ain't movin' nowhere for donkeys' years.

kinster_2

Kenny4315 wrote:

In strict terms you have the asset but the loan is secured against it.

Asset House £100k

Liability Mortgage Debt £90k

Net Assets £10k

Obviously if you don't pay they will repossess your house.

That's probably your level/view. In simple terms assets put money in your pocket, and liabilities take money out of your pocket. So it's the banks asset as it puts money in their pocket.

Kenny4315

EdInvestor wrote:

I'm not sure quite how speculators are supposed to push up prices.
But how would it cause a rise?

Speculation about price rises have pushed up prices by several ways :

1. Buy To Let investors, many of whom have little or no idea of the long term commitment required in this area, and have just jumped on the band wagon assuming it to be a sound investment without any research or financial thought, regarding matters such as occupancy rates, fire regs, Multi Occ, Captial Gains Tax, etc. Many have ignored the fact that in recent times, rent is less than mortgage, even without other costs such as agents, gas certificates, R&R, etc.
2. Many investment funds have a high property value within them, which have been giving high returns and have lead to further investment. (mainly in commercial property)
3. Many individuals have speculated on price rises, while ignoring the fact that although there house has gone up by X the other have gone up also. My house is worth £Xk mentality and I got it for £X- £Y. So i'll blow the additional cash of cars, holidays, etc, as I expect this to be a continual trend, result massive national debt.
4. The rise of the amateur property developer, with the aid of TV programs, who buy to high, go over budget and still make a profit. This is again speculation of long term market rises, when are they going to stop showing 2 year old repeats on TV, lets see them do this now and see how it goes.

5. The main one is however, I'll just stretch myself to my absolute limits financially and then a bit more, because houses are going up and I must out-bid any other party, so bidding wars, gazumping, over-valuation by EA's become the norm. All of which in the short term raise prices to a level that can't be sustained in the longer term.

I remember a few years back talking to various investors who said get your money into shares young man it is a sure fire win, I've made £X out of them. I said to them no I'll put my money in property at this point in time shares are to high and property is too low. Result, shares halved in 2 1/2 years, property went up by 65% in the period.

I have now reversed this in the past 2 years, as shares are now the sound investment choice, not property. Shares are low while property is over-valued. It is as simple as that.

Many of those that are re-mortgaging (not just getting better rate but releasing equity) are speculating on the future value of the house they live in because if they have remortgaged to the hilt to buy rubbish and squander it then if prices fall they are in the doggy do-do to a greater extent than the ftb as more often they will have further commitments, family, etc.

Kenny4315

kinster wrote:

That's probably your level/view. In simple terms assets put money in your pocket, and liabilities take money out of your pocket. So it's the banks asset as it puts money in their pocket.

Not my view it just how accounting works, for every credit there is an equal and opposite debit. If you had a balance sheet then thats how it would look. An asset or liability in itself neither takes nor gives money to your pocket unless it crystallises. Ie the asset is sold or the liability paid. The money from your pocket is only taken to service the debt in itself (interest), along with a small amount of capital (if repayment).

For example, A car is an asset but it does not put money in your pocket as it is a wasting asset.

kinster_2

Kenny4315 wrote:

Not my view it just how accounting works, for every credit there is an equal and opposite debit. If you had a balance sheet then thats how it would look. An asset or liability in itself neither takes nor gives money to your pocket unless it crystallises. Ie the asset is sold or the liability paid. The money from your pocket is only taken to service the debt in itself (interest), along with a small amount of capital (if repayment).

For example, A car is an asset but it does not put money in your pocket as it is a wasting asset.

yes, that's the regular view. But the view I see it helps me with the cashflow and sticks cash in my pocket