HP expect the rate of decline to accelerate, Economist.

RDB

HOUSE prices dropped in Britain by another 1.8% last month, according to figures just released by Nationwide, a building society. And there are reasons to expect the rate of decline to accelerate. Consider the plight of first-time buyers, for whom house prices are still too high. It does not help them that interest rates are at their lowest for 400 years (at 1%); mortgage providers are hardly in a state to lend on high multiples of incomes at the moment. The lows for these ratios are around half the current levels. So to reach the mid-1990s buying point, either incomes have to double (not going to happen any time soon) or prices have to halve. Of course, there is nothing written in stone to say that things have to be as bad as they were in the mid-1990s. But they might be worse. The recession in Britain looks set to be deeper and unemployment is likely to be higher.
Read the full blog from Buttonwood

http://www.economist.com/daily/chartgallery/displayStory.cfm?story_id=13185147&source=features_box4





How, given this graph, are house prices likely to stabilise in the near future? Indeed, the latest 1.8% monthly fall suggests the trend is accelerating.

chrisandanne

It is my firm opinion that house prices will drop to 2002 levels or lower.

If I had read the above to my five year old grandaughter and shown her the graph she would be of the same opinion.

How anybody can still think that houses will maintain their over valued prices during a recession/depression beats me. Think bubble...popped...it's over, just a matter of time.

A x

Dan:_4

I tend to agree chrisandanne.

The only argument left now is 'For how long will prices fall?'

luvpump

Dan: wrote: »

I tend to agree chrisandanne.

The only argument left now is 'For how long will prices fall?'

Blimey Dan..Have you had a road to Damascus experiance ?? ..Have you "Seen the light" ?? ..So to speak... I had a look on Rightmove this evening, I know my area very well, even allowing for accepted offers to be below asking price, some sellers are clearly living in fantasy land, A long way to fall yet !!... I have said many times ,not till 2010 till i buy... Thats IF I have a job ofcourse ..

Dan:_4

luvpump wrote: »

Blimey Dan..Have you had a road to Damascus experiance ?? ..Have you "Seen the light" ?? ..So to speak... I had a look on Rightmove this evening, I know my area very well, even allowing for accepted offers to be below asking price, some sellers are clearly living in fantasy land, A long way to fall yet !!... I have said many times ,not till 2010 till i buy... Thats IF I have a job ofcourse ..

Im not fully converted yet! My current view is that prices will bottom out by the end of 2009 with around a further 10% downwards. So, your right - 2010 should be around the time to buy. Back to 2007 levels 2016-2017.

I have said it before, and i'll say it again - people looking to buy need to ensure that their credit rating is in top notch. Even a credit card missed payment from a couple of years ago can prevent you getting mortgage these days.

Wookster

Dan: wrote: »

I tend to agree chrisandanne.

The only argument left now is 'For how long will prices fall?'

My guess is that prices will fall at the same rate this year and for half of next year. After that I suspect there will be an extended period (3-5 years) of price stability.

No guesses after that.

Dan:_4

And that is all this is - pure guesswork.

I think most people's guesswork fits in with their lifes plans. i.e I will have my target deposit by mid 2011 so that is when I think prices will bottom.

ad9898_3

Wookster wrote: »

My guess is that prices will fall at the same rate this year and for half of next year. After that I suspect there will be an extended period (3-5 years) of price stability.

No guesses after that.

It's a massive drop that is, hey. Seriously, if this rate continues and I keep my job (big 'if' I know), I should be on for a 3 bed detached outright by 2011, no mortgage would be bliss, in the mean time, I'm just putting my head down and working towards the goal.

Davesnave

fatpig wrote: »

I agree. Alot of people are in denial. We're just at the very beginning of the biggest housing bear market ever.

Some people will resist the downward pressure on prices and others won't, so the fall will be rather more controlled than we might wish!

Across the road, my neighbour has workmen in, prior to what he sees as the prime season for selling. Dropping the price, isn't on the agenda. Meanwhile, two properties I've been watching have just dropped £50k, with one of them now £90k below last summer's price.

davilown

Dan: wrote: »

I tend to agree chrisandanne.

The only argument left now is 'For how long will prices fall?'

IMO , with the occasional blip, probably 5 - 6years from peak to trough.

Dan:_4

davilown wrote: »

IMO , with the occasional blip, probably 5 - 6years from peak to trough.

Hopefully your debts will be settled by then.