MSE News: House prices predicted to fall this year

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Although property prices rose in 2010, slow economic growth could trigger falling values in 2011, it is claimed ..."

Read the full story:
House prices predicted to fall this year

Meeper

Another gloomy forecast from a "think-tank" which does nothing to assist the recovery at all. All this is doing is making people wary and concerned about their situation, making a bleak scenario for some people all the more desperate. I wish some of these "centres for economic stuff" would post some good news for once instead of trying to just get their headlines and become renowned as "experts". It's a shame that they don't realise that the negative press and information contributes to peoples' perceptions of the markets which in turn causes a slowing effect on any growth that might occur.

Personally, I expect house prices to remain relatively steady this year, to be honest, but that's just my opinion. I'm not a think tank with a fancy name, so it probably doesn't count for much.

Wh05apk

Agree with you on this one meeper, for the 90% of people with steady jobs, times are currently good, with interest rates low, and goods at bargain prices.

Whilst I know he is not entirely to blame, I feel the likes of Robert Peston and the BBC have a lot to answer for, when the economy is on a knife-edge, when people are constantly told "house prices to fall by 20%" "unemployment to increase" people will naturally just hold back, which is precisely what the economy does not need!

Meeper

Exactly. Well put.

Rov

They can't just lie and tell everyone everything is going to be alright though can they? It's not a journalist job to be upbeat and positive and it's certainly not a "think tanks" job either, who are probably paid to make an honest assessment of the situation.

They are just reporting reality, and for a lot people in certain towns and city's where the public sector job cuts are kicking in in their thousands, then their assessments are probably spot on and people SHOULD be cautious.
I know if everyone was positive that would help the economy, but the correct decision for the individual is to be cautious when things are uncertain, even if thats not helpfull for the masses.

Meeper

Then perhaps they should regionalise or segment their findings to take into account prevailing conditions in every area. Making blanket sweeping statements of doom are what hurts.

CloudCuckooLand

Vested interests, who want to sell more of something, are not any better than think tanks at representing "reality". No doubt some people would be happier if 95%/100% were mortgages selling in large volumes again...

To be honest, the mortgage advisor responses here sound very much like Tony Blair, after a couple of years of criticism over Iraq..."look, its time to move on"...as though if you ignored it, the problem might just disappear of its own accord.

Except that the recovery is not secure. The cuts could result in double-dip. Even if not nationally, there are very distinct regional effects.

We have already had one period of head in the sand, when Labour failed to stop spending quickly enough, and just added to the problems that are now having to be unravelled. If we put our heads back in the sand, we risk going the way of Greece and Ireland.

Energy costs, petrol etc are all denting disposable incomes. This is not just about the 90% in employment - although a few hundred thousand public sector workers have genuine cause for concern. As for "low interest rates", FTBs paying 6%+ when the Base is 0.5%, is not low.

To paint a "one size fits all" picture of the economy and its effects on house prices is naive, agreed - in both directions. The responses here are just as blanket as the article.

The "I'm alright jack, so the rest of the street/town/county/country must be too" brigade, might just need to open their eyes a little bit.

pjcox2005

Fully agree, the article had little to cheer about as it talks about minimal falls in price, high ratios for affordability.

Like the others above are clearly hoping, perhaps towards the end of the year they and the press will be able to discuss significant falls in prices, affordability coming back to the past, interest rates higher bring a return for savers and helping to reign inflation in.

I assume that's what they refer to by good news anyway!!

mystic_trev

Guy

It's just as well you didn't post this on the Debate House prices Forum. Certain posters there would have organised a Lynch mob for you!

Wh05apk

I am not saying we should ignore all bad news, but news should be fairly represented, too often there is too much emphasis placed on the negative. Firms are always laying off staff, but normally other firms grow to take up these staff, that is how the economy ticks over, but we rarely hear about this positive news to balance things up.

An example of this I am told on a regular basis, is that "you can't get mortgages now" or "you need at least 25% deposit" I am arranging mortgages daily, and can assure you they are still available, yet if you listen to the news etc you would swear otherwise and probably cut your wrists!

brit1234

Wh05apk wrote: »

I am not saying we should ignore all bad news, but news should be fairly represented, too often there is too much emphasis placed on the negative. Firms are always laying off staff, but normally other firms grow to take up these staff, that is how the economy ticks over, but we rarely hear about this positive news to balance things up.

With respect there are lots of vested interest groups constantly trying to talk up the housing market. They constantly dominate the news at tyhe expence of independent experts. At some point despite all there spin the truth about the economic mess has to come out. Preston does that and he is one of the few people who stand up against the spin.

You simply can't close your eyes and stick your figures in yours ears thinking happy thoughts all your life.

House prices are simply too overvalued and need to come down to traditional levels.