MSE News: House prices predicted to fall this year

edited 14 February 2011 at 12:56PM in Mortgages & Endowments
35 replies 3.5K views
13

Replies

  • I respond to threads where I find them...if the moderators wish to redirect...
    Act in haste, repent at leisure.

    dunstonh wrote:
    Its a serious financial transaction and one of the biggest things you will ever buy. So, stop treating it like buying an ipod.
  • adwatadwat Forumite
    255 Posts
    Mortgage-free Glee!
    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.

    Quite agree.
    MFi3T2 #98 - Mortgage Free 15/12/2011
  • adwatadwat Forumite
    255 Posts
    Mortgage-free Glee!
    Wh05apk wrote: »

    Talking things down does absolutely no good to anyone, we simply need to be realistic.

    Talking the housing market down would do all first time buyers a lot of good in that they would be able to get a roof over their head.

    Houses are twice what they were when New Labour came to power.

    It now takes x6 average salary to buy an average priced house compared with x3 average salary back in '97.

    The market is at the top of a massive bubble which you should be fully aware of if you are a mortgage advisor.

    Not only do first time buyers have to pay double for their housing, they also have to work longer until they retire and have to pay more for a smaller pension when compared to their parents.

    You sir are the one who needs to get realistic about things.
    MFi3T2 #98 - Mortgage Free 15/12/2011
  • Id like to see a less emotive discussion on this. For example, prices will fall most at the high end but there is a lower limit below which a house should not fall.

    I think basically if you've got a solid thing people want, you're always going to be ok. Try to remember that. If I'm earning the average wage (10k? 20k?) the threat of homelessness is always at the door, not naturally, but artificially so ever since the commons were sold a couple of hundred years ago. So rest assured, the status of the homeowner in British society will always be above the renter even if the value of property moves across to environmentally destructive areas of the world.
    Order of events: Banks lose our money -> get bailed out -> were inflating GBP to cover it -> now taxing us -> next will grab your funds direct -> things get really desperate to balance the books. What should have happened?: banks go bust and we lost our money much quicker
  • Houses are still overpriced/unaffordable

    EXAMPLE

    Go back just 10years, house my area circa £60k, earning 20k x3 = £60k small deposit 5% no problem......

    NOW HOUSE MY AREA 120k earn 25k(if lucky) x3 =75k = house not affordable,deposit big problem..

    wages up circa 25% (if lucky),house price up 100% (see the problem)

    smoke and mirrors at work from the past government,now the s""t is hitting the fan...
  • It's about time they put the interest rates up!

    The house prices are way overpriced but vendors are simply holding their prices and many are trying to rent out with "to let" signs emerging everywhere. With the propossed housing benefit cuts looming later this year and a glut of such rental properties will set rents and house prices down to a more realistic and affordable level.

  • Wh05apkWh05apk Forumite
    2.9K Posts
    Part of the Furniture 1,000 Posts Combo Breaker
    ✭✭✭✭
    Every generation always seems to think house prices are too high, when we bought our first property in 1988 luckily we had a big deposit and borrowed £47k, against a £60k purchase, which at the time was about 3.5-4x our joint salaries, looking at sale prices, similar houses are now going for about £120k, however salaries for similar jobs have increased to about £35k(jointly)so comparitively the property would now be easier for a couple "like us" to buy, even with a 10% deposit they would be about 3x income.

    Incomes have risen higher, below are the figures from the ONS for the last 10 years (they are average so some sectors/areas will be higher/lower)

    Sorry have not been able to paste, but figures show about a 37% increase from 2000-2009.

    Personally I do not feel it is much harder now to purchase than it was 10/20 years ago, the difference is peoples expectations have moved on, first time buyers I see now will often be driving 2/3 year old cars, they expect to have 40" flat screen tv's dishwashers etc, I am sure we have all been told by our parents that when they first bought, it wa xyears before they could afford carpets!

    Prices reflect supply and demand, ultimately we are a small island, with too many people, and not enough new houses being built.
    shim.gifshim.gifshim.gif
    I am a mortgage adviser.
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • adwat wrote: »
    Talking the housing market down would do all first time buyers a lot of good in that they would be able to get a roof over their head.

    Houses are twice what they were when New Labour came to power.

    It now takes x6 average salary to buy an average priced house compared with x3 average salary back in '97.

    The market is at the top of a massive bubble which you should be fully aware of if you are a mortgage advisor.

    Not only do first time buyers have to pay double for their housing, they also have to work longer until they retire and have to pay more for a smaller pension when compared to their parents.

    You sir are the one who needs to get realistic about things.


    Crucially that's the point, few banks are lending 6x ordinary salaries unless you have a very hefty deposit or existing property that you could lose to the bank if rates go up or and house prices fall a lot.

  • I don't know about double dip recession, I reckon more like a quadruple dip!

    Just imaging though if Mr Brown was still at the helm.... blithely sailing towards icebergs as if we were some super Titanic Captained by a man with the arrogance and meglomania of Hitler and Stalin but without the brilliance of strategy. We'd be lucky to be trading beans with the Congo in the end.

  • rickbonar wrote: »
    It's about time they put the interest rates up!

    The house prices are way overpriced but vendors are simply holding their prices and many are trying to rent out with "to let" signs emerging everywhere. With the propossed housing benefit cuts looming later this year and a glut of such rental properties will set rents and house prices down to a more realistic and affordable level.

    Do you not think that if interest rates go up then rents will also go up. I doubt that too many BTL landlords will soak up rate rises, especially if rises are hitting them hard in the pocket.

    With curbs on lending preventing FTBers from buying, this seems to be a bumper time for landlords because potential housebuyers are stuck renting.

    If people are struggling financially you tend to find that they bunker-down in their existing homes instead of climbing the housing ladder and so decent housing stock doesnt come onto the market. The trash will drop in price but decent homes will retain their value simply because they are not up for sale.

    Possibly. I'm just providing alternative views to further debate. :)
This discussion has been closed.
Latest MSE News and Guides

A guide to council tax bands

Lower your band & save £1,000s

MSE Guides

Cinema MoneySaving tips & tricks

Including year's 2for1 movies for £1

MSE Deals