House prices by 2015

gubdlog

Will house prices go up more than inflation the next few years?

Radiantsoul

Maybe. Maybe not.

Thrugelmir

Would do you think wage increases will be in that time frame?

Turnbull2000

Mainstream lenders should return to 95% mortgages this year, with 100% following in 2012 or 2013. With this in mind, looser mortgage criteria will likely leave prices 20% or so higher I reckon. Though the market will be driven by amateur and institutional (in particular) property investors rather than first-time buyers.

amcluesent

I expect prices to keep up with inflation on average, but that will disguise N/S variances and reductions outside the cities.

We're about to see institutional funds with £100M+ war-chests pile into the BTL market and have 1000s of houses under management, getting economies of scale to meet social housing needs as benefits are capped. This demand will lift prices at the entry level.

By about 2014, millions of public sector peeps will release that further payment into their 'reformed' pensions is pointless so will look at houses as their 'pension', putting further upward demands on the market.

As inflation make non-tangible goods increasingly worthless, peeps will latch onto houses as hedge against inflation which, unlike gold, provides a yield. Expect to see retail funds provide exposure to BTL without the risks of illiquid 100% ownership of single house.

Demographics will start to increase demand, plus continued net immigration will increase demand in the Midlands

baby_boomer

amcluesent wrote: »

By about 2014, millions of public sector peeps will release that further payment into their 'reformed' pensions is pointless so will look at houses as their 'pension', putting further upward demands on the market.

As a "public sector type peep" I have to disagree. We are moving down from "brilliant" to "good" pensions.

Why would anyone opt out of a free 9% salary contribution from their employer in order to invest half the money available to them in a potentially volatile asset?

abaxas

About the same on average. With the 5% PA effective paycut due to inflation, we simple cant afford it.

However I believe some areas will go up by as much as 20-30%, while others will be down 20-90%.

I know 90% sounds huge, but we are talking the end of nowhere places where prices increased by 10-20 fold from 1999-2007. Lots of these places in the NE are currently about 30-40% down on peak.

harrup

Turnbull2000 wrote: »

Mainstream lenders should return to 95% mortgages this year, with 100% following in 2012 or 2013. With this in mind, looser mortgage criteria will likely leave prices 20% or so higher I reckon. Though the market will be driven by amateur and institutional (in particular) property investors rather than first-time buyers.

Is there a particular rationale for your prediction? Not trying to be confrontational or argumentative, I just was a tad flummoxed by the seeming certainty of your statements.

I'd be the first to admit that this is hardly my area of expertise - but common sense would suggest that the government/country urgently needs to borrow money given the shape it is in. Who can it borrow money from? People who have money -savers.

Rightly or wrongly, it seems to me that you are hoping for a swift return of the previous paradigm...who got us collectively in the Merde we are in.

chewmylegoff

amcluesent wrote: »

By about 2014, millions of public sector peeps will release that further payment into their 'reformed' pensions is pointless so will look at houses as their 'pension', putting further upward demands on the market.

if millions of public sector workers decide not to pay the employee contribution into their pension schemes, they will have to leave the schemes, thus waiving their entitlement to future pension payments. would be pretty helpful for the UK's off balance sheet liabilities if they did do this en masse, but in reality their 5% employee contributions (or whatever they are asked to pay in) are not going to support property purchases (and it would be financially illogical to withdraw from any scheme where the employer pays in, as you are effectively taking voluntary pay cut).

chucky

if on average there is HPI of 3% over the period, house prices could be 15% higher than today.

an average HPI of 4% would be 21%.

Generali

Turnbull2000 wrote: »

Mainstream lenders should return to 95% mortgages this year, with 100% following in 2012 or 2013. With this in mind, looser mortgage criteria will likely leave prices 20% or so higher I reckon. Though the market will be driven by amateur and institutional (in particular) property investors rather than first-time buyers.

How do you think that tallies with Basle III risk weighting of mortgage assets? IIRC, a UK bank would have to hold 7x as much in mortgage assets lent at 95% LTV on its books in reserve against deposits as it would mortgage assets lent at 70% LTV.

High LTV lending is going to be expensive for banks in future.