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Debate House Prices


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House Prices - Which way are they headed?

I realise this is going to result in a finger in the air kind of answer, but I am a strong believer in trends and analysis based on historical events.

Both my sister and I are looking to buy properties in the very near future, we have seen a marginal drop in prices and expect to get a further discount off the asking price.

Are prices being held artificially high due to sellers holding their properties back (for fear of a poor price) and therefore the supply of homes going onto the market are reduced? resulting in higher prices?

What are your views on the future values of properties, are they really expected to drop significantly later in the year or 2010/2011?

Some reasons that make me think to buy now are:-

1) Mortgage rates keep going up
2) No stamp duty for houses in my price range

but will this be counteracted by big price drops in the future?

Your views please.... :D
«1345

Comments

  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Here is a survey being conducted by H&L, bear in mind it is not a random survey and will mainly be population of people who invest in the Stock Market and Bonds, still the results are interesting and fairly bullish.




    Have your say...

    What do you think will happen to property prices over the next 12 months?
    • Fall by more than 5%
      poll-bg-1.gif (26.83%)
    • Fall by up to 5%
      poll-bg-2.gif (21.87%)
    • Stay the same
      poll-bg-3.gif (25.63%)
    • Rise by up to 5%
      poll-bg-4.gif (20.67%)
    • Rise by more than 5%
      poll-bg-5.gif (5.00%)
    From a total of 2259 votes


    http://www.h-l.co.uk/
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • andykn
    andykn Posts: 438 Forumite
    Part of the Furniture Combo Breaker
    Whilst Bank Of England rates may rise, rates for fixed rate mortgages are already far above the base rate and should not rise much more than they have recently any time soon. If they do, further house price falls would seem to be inevitable.

    In the unlikely event of prices rising, you can buy then and maybe might lose out 5%. Prices could continue to fall another 20 or 30% though.

    Wait and see.
  • LydiaJ
    LydiaJ Posts: 8,083 Forumite
    Part of the Furniture Combo Breaker Mortgage-free Glee!
    My personal opinion is that they will basically stagnate - a month or two of little rises, another month in which they fall slightly - until the general election. Then we will start to see spending cuts and tax rises and even more job losses, and after a bit of a time lag, house prices will fall further.

    But I'm guessing. And there may be some wishful thinking, because I'm currently priced out of the area I want to live in!
    Do you know anyone who's bereaved? Point them to https://www.AtaLoss.org which does for bereavement support what MSE does for financial services, providing links to support organisations relevant to the circumstances of the loss & the local area. (Link permitted by forum team)
    Tyre performance in the wet deteriorates rapidly below about 3mm tread - change yours when they get dangerous, not just when they are nearly illegal (1.6mm).
    Oh, and wear your seatbelt. My kids are only alive because they were wearing theirs when somebody else was driving in wet weather with worn tyres.
    :)
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    V6Matt wrote: »
    I realise this is going to result in a finger in the air kind of answer, but I am a strong believer in trends and analysis based on historical events.

    Both my sister and I are looking to buy properties in the very near future, we have seen a marginal drop in prices and expect to get a further discount off the asking price.

    Are prices being held artificially high due to sellers holding their properties back (for fear of a poor price) and therefore the supply of homes going onto the market are reduced? resulting in higher prices?

    What are your views on the future values of properties, are they really expected to drop significantly later in the year or 2010/2011?

    Some reasons that make me think to buy now are:-

    1) Mortgage rates keep going up
    2) No stamp duty for houses in my price range

    but will this be counteracted by big price drops in the future?

    Your views please.... :D

    I wouldn't necessarily view a lower purchase price as getting a discount.

    You need to look at property in your area and the price it sold at. Unlike cars for example, houses are different in many ways. Its not like buying off the shelf at Tescos!

    Intrest rates to rise further, a high possibility.

    High prices to drop signficantly - will fall further though may hold up to a degree due to lack of willing sellers. More likely long period of stagnation.
  • ad9898_3
    ad9898_3 Posts: 3,858 Forumite
    edited 7 July 2009 at 1:55PM
    -20% or so over the next 3-4 years, IR's hikes, unemployment, tax hikes, public sector cuts etc... have all yet to be felt in this recession.

    Don't forget the drops we have seen so far are purely down to the banking system meltdown last year, and nothing really to do with the current recession, as that recedes into history, so we get the slight rise in prices we are seeing in some areas.

    The effects of the recession and more to the point the borrowed money that is being used to try and bail us out that will have to be paid back as yet to be felt, this will cause prices to fall back over the medium term.
  • HAMISH_MCTAVISH
    HAMISH_MCTAVISH Posts: 28,592 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    At the end of last year, most of the mainstream economists and commentators were predicting a fall of 35% to 40% from peak. Most of them have now changed their prediction to around 25% to 30% from peak.

    Falls to date are 17% from peak according to land registry, and a few percent more on some of the less accurate (but more timely) other indices.

    Prices are currently rising, and are up from a low of 147K to a current of 155K on the nationwide. LR has yet to show such a bounce but it lags by a couple of months.

    The latest forecasts from CEBR, Lloyds and now also RBS are for further falls of between 6% and 10% before the absolute bottom is reached.

    Whether or not those falls occur really depends on the next 3 months, if prices keep rising til september, then I'd expect the trough was already reached in Feb of this year. The small falls over next winter will not be enough to breach that low.

    If however prices start falling again this month, then I'd expect the current mainstream opinion to be correct, and the final low to be around 25% to 28% off peak, reached in Q1 2010.
    “The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.

    Belief in myths allows the comfort of opinion without the discomfort of thought.”

    -- President John F. Kennedy”
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    ad9898 wrote: »
    -20% or so over the next 3-4 years, IR's hikes, unemployment, tax hikes, public sector cuts etc... have all yet to be felt in this recession.

    Don't forget the drops we have seen so far are purely down to the banking system meltdown last year
    , and nothing really to do with the current recession, as that recedes into history, so we get the slight rise in prices we are seeing in some areas.
    .

    Is that all? oh just meltdown icon7.gif
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • Yakubu22
    Yakubu22 Posts: 640 Forumite
    500 Posts
    short term it appears they are heading up or holding...medium term i think they will decline again before a proper recovery starts.
    "For those who understand, no explanation is necessary. Those who don't understand, dont matter."
  • dgl1001
    dgl1001 Posts: 183 Forumite
    I really can't see any further massive falls in the housing market. As has been pointed out above, we have had the total melt down of the financial system but house price have only fallen by say 25%. Compare that to other sectors, say new car sales, and prices have held out quite well, so futher falls of say 20% are, in my opinion, highly unlikely. We are also getting more good economic news, than bad over the last year, so perhaps we are over the worst of it. However, if you are a bear, then the following applies:

    • BTL landlords are the lowest form of life
    • Nobody can afford a a) deposit or b) secure a mortgage
    • Everyone has loads of debt
    • The shortage of housing is not a problem because they see "For Sale" signs when they come to work
  • chucky
    chucky Posts: 15,170 Forumite
    10,000 Posts Combo Breaker
    Yakubu22 wrote: »
    short term it appears they are heading up or holding...medium term i think they will decline again before a proper recovery starts.

    cue the allegedly increased mortgage rates and it's a double whammy if you don't buy property in the period between the short and medium term... ouch... and miss the opportunity that comes along once every generation...

    will there be that much of a saving against the increased cost of a mortgage?
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