"What’ll happen to house prices?" poll discussion

Former_MSE_Lee

Poll started 24 May 2011, click here to vote

What’ll happen to house prices?

Annual UK house prices have reportedly fallen around 1% in the last year. So it's time for our regular poll to ask you where you think they’ll go next.

[FONT=&quot]What do you think’ll happen to UK house prices over the next 12 months?[/FONT]

A. Increase over 20% (big boom)
B. Increase 10-20% (boom)
C. Increase 5-10%
D. Increase 2-5%
E. No real change
F. Decrease 2-5%
G. Decrease 5-10%
H. Decrease 10-20% (smaller crash)
I. Decrease over 20% (crash)
J. I really have no idea


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Saucepot

They will either go up, go down or stay the same. You can count on that.

bill_the_bus

Glad this has been posted. We are hoping to sell up in the next 3 years (depends how long i can keep my council job) and have been discussing the merits of staying put and selling when we are ready and taking on the chin any drop or putting on the market soon and hoping we get a fair price and then renting. We own about 50% of the property, other 50% mortgaged but hope to get jobs that allow us to live in our tourer.

Paul_Jakeman

I have been watching house prices for a good number of years. At the peak prices were vastly in excess of where they should have been. I look at the rent that similar properties are receiving and use 18 times annual rent to determine the house price. 18 because this is the historical average. There is a marked difference throughout the UK with some areas with properties only 12 times and others with 28 times. I recently bought in Perth very cheaply, only because the property is non-standard construction. I did look at many properties but they were all between 20 and 25 times annual rent. I estimate that prices in Perth are overvalued by between 16-24%.
This is bigger than the UK average on this basis I estimate that in general property will continue to fall between 10 and 15% over the next 12 months.

sharrison01

A better poll would be one that includes/excludes London. Property prices in London showed a relatively small dip during the recession and have probably gone up if anything in the past year. I would expect a good increase in London house prices over the next 12 months and this will offset a continued decline around the rest of the country. The calculation will be the difference between London strength and the rest of the UK's weakness...

one2escape

I believe they will go down quite quickly when the interest starts to increase

FATBALLZ

I don't see them going up, but I don't see them going down more than 5% either due to a supply shortage and government policy of keeping prices high at all costs. They'll probably stay roughly where they are until wages catch up a bit.

shzl400

It all depends where you live. My area has just been linked to Canary Wharf and North London by the Overground, and is regularly quoted by Phil 'n' Kirstie as a place to look for value for money. I see modest steady growth continuing.

brit1234

shzl400 wrote: »

It all depends where you live. My area has just been linked to Canary Wharf and North London by the Overground, and is regularly quoted by Phil 'n' Kirstie as a place to look for value for money. I see modest steady growth continuing.

Is this the same Kirsty who said she would eat her hat if house prices crashed in 2007?

Is this the same Phill whose property company went bankruprt.

Kirsty and Phill are nothing more than property speculators who just got caught up in the biggest international property bubble ever.

If you want to know what is going to happen to property prices speak to economists and not vested interest property speculators.

The truth is house prices are still highly overvalued and there is no money left to keep them at this level. They are falling at the peak selling period when interest rates are at 0.5%.

There are so many reasons why prices are going to fall and the only one people can say why they will rise is limited supply as we are an island. However that argument has been proven false after the price crash in Japan in the 80s. Same limited supply, same growing population, same house price bubble and same crash.

HAMISH_MCTAVISH

Prices are currently stagnant, and average just 11% below peak, which is around 10% higher than they were in early 2009. In around 10% of areas, they're rising slightly. In around 20% of areas, they're falling slightly. And in 70% of areas, they're stable. But for 80% of the people in the UK, they are not dropping at all, and haven't done for over 2 years now.

Some areas have already exceeded the previous peak, and not just in London. In my area for example, which is about as far from London as you can get, actual selling prices are now 15% or so above where they were at the start of 2007, and are up 4% year on year. As every year passes we will see more and more areas recover to their previous peak prices, so the clock is most certainly ticking.

Rents are soaring, now at a new record high and still rising at twice the rate of wage inflation, as the mortgage famine forces a generation of FTB-s to enrich their landlords instead of themselves.

Buy to let lending is the one section of mortgage lending that is dramatically up year on year, as landlords buy up the cheaper houses instead of FTB-s, due to the yields being so good.

And housebuilding is at it's lowest levels in over 100 years, whilst population continues to grow at near record levels. We only build around 100,000 houses a year, but form 250,000 new households a year.....

And that's before the biggest generation of FTB age people in history, bigger even than the baby boomers, starts reaching the age to buy from 2012/2013 onwards. This generation will peak in size by around 2020 at almost a million a year versus 680,000 a year at present, and it will be 2028 before there are as few FTB age people in the UK again as there are today.

FTB-s have one more year, maybe two, of the current stagnation.....

And then the biggest generation in history crashes into the lowest level of housebuilding since Victorian times, with only one possible result.... And it ain't falling prices.

HAMISH_MCTAVISH

brit1234 wrote: »

after the price crash in Japan in the 80s. Same limited supply,

False.

Japan kept building throughout, we've virtually ground to a standstill, with house building at the lowest level since 1923 last year, and down 41% from that level so far this year.

same growing population,

False.

Japan's population has been in decline for decades.

We add 400,000 people a year, create 250,000 new households, and build just 100,000 houses.

same house price bubble

False.

Prices in Japan at peak reached $1,000,000 per square metre in some areas.

Or roughly 20 times higher than the Candy brothers incredibly expensive development, which is the most expensive property in Britain.

UK average prices today are just 4.5 times male mean income, versus a long term average of 4 times male mean income. Not even remotely in bubble territory.

If you want to see a real bubble, look at Beijing, with average house prices in some areas of 88 times average earnings.

and same crash.

False.

Our crash was tiny by comparison, and the recovery far faster. Because we never had a proper bubble, like Japan and their million dollars a metre, or China and their 88 times average income.