House prices 'will fall further'

brit1234

House prices 'will fall further'

House prices will probably fall by another 10% in the coming year, predicts the Royal Institution of Chartered Surveyors (Rics).

That would produce an eventual price drop of 25% from the peak recorded in the summer of 2007 - the biggest ever.

The annual forecast from Rics suggests that property sales may have bottomed out and could rise by 10% during 2009. :mad: Ramping again

But Rics says the government must take action to restore the flow of mortgage funds to borrowers. "The numbers are going to get worse before they get better", warned the trade body's chief economist Simon Rubinsohn. "Lenders are likely to remain cautious in the near term in the absence of any guarantees on mortgage backed securities. "This, coupled with an increasingly gloomy economic picture, suggests that house prices will continue to decline in 2009," he added.

Fewer new houses
The past year has seen an unprecedented slump in house prices and sales.

A serious housing shortage will fuel another bout of volatility once the current crisis eases

Simon Rubinsohn, Rics
:rotfl:With a million buy to lets for sale, I don't think so.

So much so that leading lenders like the Halifax and HBOS, and their trade body the Council of Mortgage Lenders (CML), have been deterred from making any forecasts for next year.

"Uncertainty surrounding any forecast is much greater than is usually the case," Mr Rubinsohn said.


Unlike those other commentators Rics is still willing to make a formal forecast.
As well as a 10% price drop, and 10% increase in sales, it says there will be a further big decline in house building.

The surveyors suggest that new housing starts will plunge from their already depressed level of 110,000 this year to under 80,000 in 2009, far short of the government's own target of building two million new homes by 2016.
"It is likely that there will be even fewer new starts in 2009 leading to a very real risk that a serious housing shortage will fuel another bout of volatility once the current crisis eases," Mr Rubinsohn said.

Interest rates
Rics has taken some heart from the fact that its monthly surveys have found that enquiries from potential new buyers have been picking up in the past few months.
But it warns that if the economic recession turns out to be deeper and longer than expected, and if unemployment rises to three million or more, then house prices are likely to fall even more than its current prediction. (get out clause for underestimating the prediction)

Rics says it expects the authorities will cut official interest rates by a further one percentage point in the first quarter of 2009, from 2% to just 1%. But any revival in the market will also depend on the effectiveness of the various government programmes aimed at providing more help to the banks, so they they can start lending again on less restrictive terms than at present.

"As yet, however, there are few signs of improvement in lending behaviour," Rics warns.

http://news.bbc.co.uk/1/hi/business/7798019.stm

Interesting article saying prices will fall a little, rise 10% and massively crash. I sense RICS are hedging their bets a little. Whats the point of a prediction if you say anything is possible.

Davesnave

brit1234 wrote: »

http://news.bbc.co.uk/1/hi/business/7798019.stm

Interesting article saying prices will fall a little, rise 10% and massively crash. I sense RICS are hedging their bets a little. Whats the point of a prediction if you say anything is possible.

I think they're predicting a 10% volume rise in sales, not price increases. Let's face it, they could hardly go lower!

Nevertheless, they seem to have most bases covered so, overall, it still sounds about as scientific as using a piece of seaweed to forecast the weather.

yollyp

This is the right time to buy houses because of its low price. Lucky for those who save for the rainy days - though this is not a rainy day to be considered for the cash-wealthy, this is a good opportunity to spend the savings to a money-making buying spree.

IveSeenTheLight

brit1234 wrote: »

http://news.bbc.co.uk/1/hi/business/7798019.stm

Interesting article saying prices will fall a little, rise 10% and massively crash. I sense RICS are hedging their bets a little. Whats the point of a prediction if you say anything is possible.

I find it interesting how some people take an article and completely read it the way they wat,bolding areas in their beliefs and glosing over opposing statements

i.e. some points I notice

But it warns that if the economic recession turns out to be deeper and longer than expected, and if unemployment rises to three million or more, then house prices are likely to fall even more than its current prediction. (get out clause for underestimating the prediction)

A few uncertanties there

Interesting article saying prices will fall a little, rise 10% and massively crash

No it says prices will fall and sales will increase 10%

leading to a very real risk that a serious housing shortage will fuel another bout of volatility once the current crisis eases,"

No bolding here brit?

It would be nice to see a balanced and accurate viewpoint put accross

mewbie_2

IveSeenTheLight wrote: »

It would be nice to see a balanced and accurate viewpoint put accross

Suppose so. Although extremist shouting matches are fun too.

luvpump

http://uk.reuters.com/article/summitNews/idUKL1863404220080219

A couple of Quotes from there 2008 "Predictions"
"the probability of a 1990s-style UK housing crash was still about 1-in-10, in line with a previous forecast made in September."

"The odds (since then) certainly have not increased partly because the economy does seem to be displaying real resilience in the face of headwinds," he said."

Just for the record in Dec 07 they had predicted "Flat" Property prices for 08 :rolleyes: ..

In other words this new report by Simon Robinson is likely to be as accurate as his previous ones..... I.e not very !!.. Just another "Expert" with a vested interest fighting the tide, nothing more ...

luvpump

yollyp wrote: »

This is the right time to buy houses because of its low price. Lucky for those who save for the rainy days - though this is not a rainy day to be considered for the cash-wealthy, this is a good opportunity to spend the savings to a money-making buying spree.

Well I have the Cash to spend, & I wont be buying until late 09 - 2010, depending on your circumstances ofcourse, but this is NOT the time to be buying IMO ..

davilown

yollyp wrote: »

This is the right time to buy houses because of its low price. Lucky for those who save for the rainy days - though this is not a rainy day to be considered for the cash-wealthy, this is a good opportunity to spend the savings to a money-making buying spree.

How is this the time to buy a house? Surely it would be in twelve months? Anyone buying now either have too much money, are desperate or are just stupid.
If you want to buy, wait until people have to sell and get the price down. No I'm not being cruel, evil or profit off other peoples losses, just don't see why people should buy now and have 'lost' money by the middle of next year. People bought their houses at an inflated price and they knew that the house prices would have to come down. The signs and warnings have been there since 2003 at least.

sircharles

brit1234 wrote: »

http://news.bbc.co.uk/1/hi/business/7798019.stm

Interesting article saying prices will fall a little, rise 10% and massively crash. I sense RICS are hedging their bets a little. Whats the point of a prediction if you say anything is possible.

The report doesn't say house prices are going to MASSIVELY crash. Stop exaggerating.

davilown

luvpump wrote: »

http://uk.reuters.com/article/summitNews/idUKL1863404220080219

A couple of Quotes from there 2008 "Predictions"
"the probability of a 1990s-style UK housing crash was still about 1-in-10, in line with a previous forecast made in September."

"The odds (since then) certainly have not increased partly because the economy does seem to be displaying real resilience in the face of headwinds," he said."

Just for the record in Dec 07 they had predicted "Flat" Property prices for 08 :rolleyes: ..

In other words this new report by Simon Robinson is likely to be as accurate as his previous ones..... I.e not very !!.. Just another "Expert" with a vested interest fighting the tide, nothing more ...

:rotfl::rotfl::rotfl:

drbeat

No "shafts of light" this time?