MoneyWeek predict a fall of 50% in real terms over 3 years.

novazombie

http://www.fsponline-recommends.co.uk/page.aspx?u=mwkpropertyendo17&tc=EMYKK107&PromotionID=2147065913&

crazygaijin

interesting but I dont agree with it.

They think it will take about 3 years for 50% drops in real terms. I think it could be as soon as the end of this year.

Time will tell who is right.

Maybe even the 70% club.

Yoshua

• Moneyweek are spot on in my opinion, look :-
• According to the Halifax, house prices are falling at their fastest rate since records began 25 years ago. In the year to August 2008 the average home lost nearly £25,500 in value – that’s a 12.7% drop.
  
• House sales are at their lowest since 1978, at barely one sale a week per agent. [1]
  
• Mortgage deals are disappearing fast. In the six months to April 2008 the number of available mortgage products fell from 16,000 to 5,485. On 7 April Abbey withdrew the last of the 100% mortgage deals.
  
• The number of new mortgages approved for people buying a house dived by 51% in the year to July 2008. The average first-time buyer now needs a 15% deposit – a year ago it was 10%.
  
• In 1993 first-time buyers made up 55% of the market. That figure has now slumped to 29%.[2]
  
• According to the Empty Homes Agency, there are 850,000 empty properties in England alone. So the ‘supply v demand’ argument used by crash deniers might not be such a factor after all?
  
• Individual insolvencies are up 225% in the last 2 years as a nation of debt junkies struggles to cope. [3]
  
• In May 2007 Jon Hunt, founder of Foxtons, sold the UK arm of the business. A smart move from the first big rat to jump ship?
  
• For the second year in a row, personal debt in the UK is higher than the entire value of the economy. Before 2007 that had never happened before. [4]
  
• More than 4 million families have used a credit card to pay their mortgage this year [5]

Here’s what we think will happen.
Investors will do the maths on buy-to-let and then rush to sell up. People who’ve overstretched themselves won’t be able to meet the higher mortgage payments. They’ll either lose their homes or have to sell up.
People will scramble to sell their property. For sale signs will dominate streets.
Repossessions will rocket.
And first-time buyers, the traditional lifeblood of the market, won’t be around to take up the slack. Instead they’ll wait and see if prices go lower.


In fact there is an unsettling amount of evidence that suggests that 2009 will be one of the most painful years we’ll ever experience.

Even if we escape a repeat of the crashes of 1987, 2000 or even 1929, one thing is certain. We are set for a prolonged spell of intense volatility. Huge numbers of investors will be sent into a tailspin of panic as apparently safe investments nosedive and the investment strategies they’ve learned in the good times no longer work.








All from that article.

Be interesting to see all the ones who disagree.

IzzyNewton

I think it's going to turn around probably closer to two years - we've still got to got through all the mess caused by the bank bailout yet. But whenever it happens it's going to level out and real estate investment remains a good investment as long as you don't go in with the expectation of making a quick buck. It's an Investment not a cash cow.

beecher

If we're talking about a 50% cut from the peak then agree that it'll happen quicker than that - perhaps by this time next year. Then expect a stagnation in prices for a couple of years. Then the whole thing will probably start again, as no-one ever seems to learn that pyramid schemes aren't sustainable.

HAMISH_MCTAVISH

Oooooops.

Pimperne1

Moneyweek have the cheek to say:

"Then the great crash of 2008 came along and ended the property boom — just as we at MoneyWeek magazine had predicted".

Well, actually they did predict a crash but their Editor had been predicting it since 2004 and as we all know she has caught a bit of a cold from Selling to Rent. This was the standard bearer for the HPC website - the subscribers from over there should be asking for their money back.

Blacklight

moneyweek lol