'What'll happen to house prices?' poll discussion

MiserlyMartin

IveSeenTheLight wrote: »

At 1000 votes 74% of the voters think house prices will stay the same or rise in the next 12 months.

Only 21% think house prices will be lower in the next 12 months.

That is a sure sign prices will fall now then.

MiserlyMartin

StiflersMom wrote: »

Wow ! At 3,317 votes, it seems that those predicting rises outnumber those predicting falls by 2 to 1 !!! What great news that MSE readers are so tuned in with what is happening in the wider housing market. Great news for us all if house prices can maintain and increase the rises since the crash ended in March 2009.

You bought too soon, before the market had returned to fair value. You and speculators like yourself have driven prices up again temporarily. They will fall to true value soon enough. Meanwhile continue to talk the market up by all means.

StiflersMom wrote: »

Good post Carlos - so many begrudgers out there. If they grew a spine and buy a home for themselves and their future, rather than coming on here wailing about how unfair life is, I might give these views a bit of weight.

There is another house price crash due in about 15 years, so maybe if they hang on until then, they might get something cheap

:rotfl::rotfl::rotfl:

You are a nasty piece of work.

webwiz

The economy is currently in a period like the "phoney war" in 1939. Because there is an election pending no politician is telling the truth, but the international investors from whom the government has to borrow the money to finance the deficit know this so they are so far playing ball. Once the election is over either drastic action to reduce the deficit will be taken, plunging us back into recession, or even worse the required action will not be taken and the government will be unable to borrow at affordable rates. Darling says he will reduce the deficit, currently £178,000,000,000 per year by 50% in four years but he has not said how this will be done. Whatever method he uses will cause a recession. Even if he managed to achieve this it is only the annual deficit he is reducing not the accumulated total which would have increased by about £500,000,000,000 in those 4 years and interest has to be paid on the accumulated deficit. The only way out for the UK economy is for an enormous number of people ceasing work in the public sector and working instead in the private sector but this will be very hard to achieve in the time available to us. I forsee a period of negative growth, high unemployment and vastly higher interest rates. The only thing which puzzles me is why both Labour and Tories seem to want to win an election which would be a good one to lose, as it could be the deathknell for whoever wins.

jonni3000

I have found this a very interesting survey and thread. It seems that the consensus is that house prices will remain largely static for the next year which is a great thing for business. What we do need is for the market to stabilise to what it was before the turn of the millennium when the majority of mortgages for house purchase came from deposits and savings of those lenders, and not the international money markets.

I have found that land prices are now much more realistic, and in some cases have dropped by 60%. This is always a problem as building land is a finite resource; they ain't making it anymore - as it gets used up, the value of that remaining goes up. When the current land values are added onto the more competitive labour rates that trades are now willing to price at, and add some of the great deals available on materials that merchants are willing to offer, it means that houses should become more affordable in the long run as the costs have come down. I have certainly seen my general building costs reduce, however, (in my case) this reduction in general build costs is being taken up by the renewable energy elements that I now incorporate into the build - i.e. solar water heating, greywater recycling, rainwater harvesting, insulation to 25% above current Bld Regs, materials with 80% recycled content. What you gain on the swings, you lose etc, etc..... Still, I'm happy that the houses that I build are more energy efficient than a lot of others out there.

Banks are OK at lending at 65% on TOTAL development costs, so it pays to be choosy on the sites that are out there 'cos any profit made has to go to fund the next land purchase and the remaining 35% of build costs. Got a meeting next couple of weeks with RBS re another site - but I suspect their interest rates and repayment terms will be high :eek: It is not a quick payback on housebuilding

We do have a major problem in this country with housing. We need to be building 250,000 houses a year for the next 10 years to keep up with population growth (demand) but we achieved about 65,000 build completions in 2009. We are now building less houses since the end WWII, but the population is still growing, so demand will always outstrip supply unless some major changes are made to national planning policy and this will always impact on prices. Between 1930 and 1939 we built over 3 million new houses in this country - if you do the maths, that equates to over 300,000 houses each year in that decade - we can (currently) achieve only a fifth of that. If demand outstrips supply then prices will go up; the only reason that prices have dropped recently is due to the restriction in demand caused by the banking crisis. When that shock eases then demand will start increasing and prices will start rising again if the supply doesn't match the demand.

How it is going to be over the next few years is anybody's guess...just buy a house to live in and stop watching BBC daytime programmes on housing

Greenski

The likely scenario is a few years of static or slightly increasing prices in nominal terms (but a fall in real terms) as a result of efforts by the government (that will include the incoming government) and BoE to inflate the problem of mortgage debt away (don't forget the the public holds a lot of this mortgage debt via the nationalised banks). Judging by the results of this (quite large sample) survey, people expect flat prices or a small increase, so that is already fixed in the mind of sellers and buyers. And you can't ignore the shortage of building, especially bigger houses. So sorry, but no crash.

fabbman

Whatever terminology you use for this discussion the simple fact remains........the cost of purchasing a house relative to income is substantially high, and as a result those without equity would be silly to purchase. The cost of borrowing is too high - no F.I. wants to lend unless there is sufficient equity in the house already!

I say lenders should not lend above 80% LTV.

fabbman

as12111 wrote: »

I don't resent because I'm not actually looking to buy property and glad of it because I feel I'd be getting ripped off if I was buying now

I agree, there is no value in buying a house now. I think prices over the course of the next 5 years will level out, the worrying concern should be the mortgage - ok you can get one now perhaps, but what do you do when your 2/3/5 year deal expires? Credit is getting increasingly difficult to obtain.

I sold my property in 2006 with a hunch this crash was coming!

jonni3000

Greenski wrote:-

The likely scenario is a few years of static or slightly increasing prices in nominal terms (but a fall in real terms) as a result of efforts by the government (that will include the incoming government) and BoE to inflate the problem of mortgage debt away (don't forget the the public holds a lot of this mortgage debt via the nationalised banks). Judging by the results of this (quite large sample) survey, people expect flat prices or a small increase, so that is already fixed in the mind of sellers and buyers. And you can't ignore the shortage of building, especially bigger houses. So sorry, but no crash.

Absolutely on the money! Fully agree Greenski

relaxtwotribes

webwiz wrote: »

The only way out for the UK economy is for an enormous number of people ceasing work in the public sector and working instead in the private sector

Agreed, but with a caveat. This is that the private sector has shed jobs in the past 2 years and forcing people out of the public sector will have no benefit until the private sector has the jobs available to take them. However, if one believes this to be true then the public sector should make serious adjustments to move millions of its employees out of non-productive jobs into good value added jobs. At least by doing that the country gets more benefit for its taxes (and borrowings that will eventually be repaid out of future taxes). Come to think of it, the public sector should be doing this in any event.
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