BBC - How low will house prices go in 2009?

neverdespairgirl

This past year will go down as the one in which the property market raced from boom to bust.

Last autumn prices started to fall each month as the international banking crisis took hold.
The mortgage supply dried up, house sales slumped by more than half, first-time buyers were increasingly driven from the market and the construction industry plunged head-long into recession.
Building sites have been moth-balled, thousands of workers laid off, and millions of unsold bricks now being stockpiled around the country.

And if the surveys by the Halifax and the Nationwide are anything to go by, house prices will end this year between 15% and 20% lower than they started - easily the biggest annual slump on record.
About £30,000 has already been knocked off the selling price of the average house in the past year, and people have stopped borrowing extra cash against the now deflating value of their homes.

So what will 2009 bring? More of the same or the beginning of an upturn?





Capital Economics - "another 15-20% off prices"
CML - "to keep falling"
Halifax - "20% fall over 2008 and 2009"
housepricecrash.co.uk - "prices will fall by 15-20%"
Nationwide - "prices to continue to fall"
Ray Boulger - "prices will drift in 2009"
Rics - "prices will slip in the first half of the year"






http://news.bbc.co.uk/1/hi/business/7727893.stm

ad9898_3

I actually think falls will accelerate in 2009, down another 20%. My reasoning is prices have fallen 15% in a year when economic conditions haven't been particularly bad. Its only the last 2-3months when the economic downturn has taken hold and become mainstream in the media.

We are in for at least 12 months of recession and possibly 2.5 years of rising unemployment.

So 20% next year.

skap7309

"We don't want to be too specific about next year," Martin Ellis replies.

Translated..........things are going to get very bad for house prices.

gingin_2

I think 12-15% falls.

I think there will be a few surprise months where prices might fall less than expected, perhaps rise by a tiny . of a percent, the bulls will cheer, and shortlived anarchy will begin on this and other forums until the subsequent month posts the standard (1.5% plus) fall. I think this is the reason why we won't see 20% falls. I would love it if it is greater. Who knows what GB has up his sleeve to try and halt this, I think he will try and interfere with reposessions.

nickj_2

i can't see how house prices can do anything but crash ,substantially
if this crash has been caused by people not being able to afford the high prices . the banks giving 125% or 7-8 x incomes have been part of their downfall , then surely they will have to go back to giving mortgages of 3.5x income like they did in the good old days , i personally can't see any other outcome than a huge decrease in prices

treliac

They will continue to fall (for another couple of years or so). Reality is only just starting to seep through into the public consciousness.

I believe that, as job losses increase, repossessions grow and money gets scarcer to find, confidence has a long way still to dip - taking house prices on a further downward tumble.

Prices won't level off until the correction has been made and houses become affordable under the earlier, more conventional mortgage terms that were linked to proven ability to repay.

wymondham

ad9898 wrote: »

I actually think falls will accelerate in 2009, down another 20%. My reasoning is prices have fallen 15% in a year when economic conditions haven't been particularly bad. Its only the last 2-3months when the economic downturn has taken hold and become mainstream in the media.

We are in for at least 12 months of recession and possibly 2.5 years of rising unemployment.

So 20% next year.

I too think prices will drop even further next year. Things will start to get tough after Christmas as unemployment jumps considerably - going on the thought most employers hold fire up to and over Christmas.

mitchaa

Where are we now £158k? (Acc to Nationwide)

So 10% will bring that down to around £142k.

So yep, i'll be in the 10% brigade for the next year of when it will bottom out.

ad9898_3

gingin wrote: »

I think 12-15% falls.

I think there will be a few surprise months where prices might fall less than expected, perhaps rise by a tiny . of a percent, the bulls will cheer, and shortlived anarchy will begin on this and other forums until the subsequent month posts the standard (1.5% plus) fall. I think this is the reason why we won't see 20% falls. I would love it if it is greater. Who knows what GB has up his sleeve to try and halt this, I think he will try and interfere with reposessions.

History tells us there will a 'bull trap', however, this time economic conditions now are so dire, I don't see one happening. As far as Brown interfering, the mortgage market is worth over £800 billion, as much as he would like to do something, he is doomed to failure, as we have seen with his feeble efforts so far.

ad9898_3

mitchaa wrote: »

Where are we now £158k? (Acc to Nationwide)

So 10% will bring that down to around £142k.

So yep, i'll be in the 10% brigade for the next year of when it will bottom out.

So even at current drops (i.e not getting any faster), you think that by March next year (when 10% more will have gone, according to recent falls), the market will bottom out ? with 6 months of recession left at least and 2 years worth of rising unemployment ?

An interesting philosophy. Incredible if it happened like that.

scousethife

I think they will go back up 10%

and the same in 2010

and every other year after that because I'm a selfish property ramping moron who is helping making life harder for everyone especially my own kids, cos I'm a scumbag