'Is the house price crash over?' poll discussion

Former_MSE_Lawrence

Poll ran 25 August - 01 September 2009:

Is the house price crash over?

Over the last year according to the Land Registry UK average house prices have crashed by a mammoth 14%, yet recently the Nationwide index has shown prices are up 2.6% over the last three months.

Is this the end of the crash – as the economy picks up – or are we heading for another drop as sellers put properties on the market to cash in?

What do you think will happen to UK house prices over the next YEAR?

A. Increase over 20%. (boom) - 1% (117 votes)
B. Increase 10-20%. (smaller boom) - 3% (248 votes)
C. Increase 5-10%. - 13% (1206 votes)
D. Increase 2-5%. - 30% (2755 votes)
E. No real change. - 24% (2257 votes)
F. Decrease 2-5%. - 9% (879 votes)
G. Decrease 5-10%. - 8% (723 votes)
H. Decrease 10-20% (smaller crash). - 4% (406 votes)
I. Decrease over 20% (crash). - 3% (299 votes)
J. I really have no idea. - 5% (431 votes)

This vote has now ended, but you can still click 'post reply' to discuss below. Thanks

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ThinkingOfLinking

I would hazard a guess at E. No real change. I've been looking at property around the entire Liverpool and Merseyside area and there haven't been any real changes in rent or buying rates even the last few weeks. Of course, this may be different in other parts of the country but overall, I don't envisage much movement either way in the next 12 months. I think it'll take longer for anything noticeable to happen.

peter_the_piper

I hope, being selfish, that the prices don't increase too much too soon. DD leaving uni next year and wants to get on the bottom rung, too fast an increase and she won't be able to (and she might want to stay at home!!!)

teddyco

I predict that the housing market is not going to show any real growth until April 2010. This government is banking on some kind of 'recovery' before the next general election and that's why we keep hearing 'reports' that the recession is over. Trust me, we will KNOW when the recession is over.

Casanova

House prices are still over 6 times the median income, and as such surely have further to fall. I hope so anyway!

cronos

I suspect it will all come down to location and the type of property. Family homes in traditionally strong areas should hold up pretty well as there is a finite supply. I wouldn't be so optimistic about new build flats, particularly in 'regenerated' areas as it strikes me there is still a glut of supply.

BigMikeyG

I think they will fall a bit more but not much as some people are still buying. I voted for a 2% fall so not much just a little.

mcgi6ah2

House prices movements, more than ever, are dependant on interest rates. Despite rising unemployment, which would naturally lead to more distressed sales, there has been a significant contraction in house price sales. This has occurred due to low interest rates allowing people to remain in-situ despite having significantly reduced incomes.

If the above is the case, then the next move on house prices remains interest rate dependant. If rates remain low it is unlikely that house prices will drop significantly if unemployment doesn't increase. If interest rates go up, then it is probable that house prices will go down. Any increase in house prices would need to be due to a significant increase in demand, something that is unlikely to occur in the next 3-4 years.

Interest rates will go up if inflation increases significantly. With the recent increase in quantitative easing it seem that the Bank of England remain of the view that inflationary pressures are unlikely to be persistent for the next 6-9 months. As such I would guess that house prices will remain stable during that timeframe. After then, it may be that increases in interest rates (there is only one way they can go) will put significant pressure on house prices.

I voted for G, with the expectation that the bulk of this would be in the last quarter of the next 12 months.

valda4

I would say that in the short term, for the next year or 2 prices will stabalise and then they will go down again for 2 reasons. Firstly, interest rates are so low that many of those whose homes may have been reposessed have managed to hold on to them. Unfortunatley rates will probably not stay this low for long higher interest rates will make it harder for these people to hold on to their homes as repayments will increase and will give people who have money in the bank interest rates that are more acceptable and so they will choose to keep their money in the bank instead of risking it on property. Secondly it is becoming increasingly apparent that who ever comes into power after the general election is going to have to raise taxes and lower spending in order to pay off the government debt which means people will have less money to spend and so will be less likey to make a big expense decision such as moving home. More sellers and less buyers will equal a weaker housing market. I don't believe the housing market will really begin to weaken until just after the olympics (certainly in London), until then it will remain stable.

montheton

i think being realistic, with job losses, real time salary cuts, and savings not too high another drop allbeit small is more than likley. with average salaries at about 23k and banks only offering about 3x salary, thats a 75%ltv with a 25k deposit on a 100k property.

at the moment i dont know anyone who has anywhere near that level of savings and with intrest rates only going to go up it doesnt look very good.

smerch1468

Anyone who thinks property prices will rise more than 10% is living in cloud cuckoo land. I expect further falls driven by unemployment, higher interest rates and forced sales increasing the volume of property for sale at any one time to depress prices further.

Take this pause for breath as being in the eye of a hurricane, the storm aint over yet by any stretch.

As a nation we should be paying off our debts and learning from this very painful lesson.