House price predictions

mystic_trev

Bearing in mind Interest rates have gone up three times in the last six months, what effect will they have on House prices by the end of the year?

RHemmings

I don't think it's possible to predict what will happen, as there are too many variables, and we are trying to predict irrational behaviour.

As for your other thread, I belive that the interest rate rise is yet another straw on the camel's back, but not enough to break it yet.

JohnInDebt

When banks start to tighten their lending criteria then you'll see a change, until then the house prices will continue to rise as people are getting desperate to get on the housing ladder feeling as though they're missing out on the pot of gold.

People are living beyond their means just to get on the the ladder. Although I doubt if rates will hit 15% anytime again soon, they could well get close to 8% and if you haven't allowed for this within your budget you could find yourself in a difficult situation.

Although house prices rise in the long term, sometimes they decrease in the short term and you could find yourself struggling to pay off a mortgage with negative equity.

mystic_trev

I've bumped this as I'd like as many people to vote as possible, and really like a sample of at least 100

So far the results are showing that 60% still thinks Property will increase this year, so we still have positive sentiment!

mystic_trev

I've bumped this again - hope that's OK mods?

Still positive - could as many people as possible vote - As I've already said, I'd like a "sample" of at least 100.

Many thanks

Trev

Alan_M_2

I have to say I'm not inclined to vote, as if I had even a vague idea of being able to predict this to anything like the above degree of accuracy, I wouldn't need to work, I'd be more in demand by the movers and shakers in the square mile than Uri Gellar is by oil companies for his divining abilities.

Take a look at the following article from FT.com this week, which is kind of relevant to this thread:-

http://www.ft.com/cms/s/08b565e2-a1a3-11db-8bc1-0000779e2340.html

rizla01

I was speaking to my solicitor the other day and before Xmas they were noticing a HUGE rise in repos and bankruptcies and were astonished to still find that after Xmas houses were still selling at a high rate of numbers. (They had allowed one of their chief staff members to go on a three week hols , not anticipating this - and Sol was working till 8pm to keep up.)

It would still appear to be a buyers market therefore the trend must be on the up, irrespective of higher interest charges.

ollyk

JohnInDebt wrote:

When banks start to tighten their lending criteria then you'll see a change, until then the house prices will continue to rise as people are getting desperate to get on the housing ladder feeling as though they're missing out on the pot of gold.

People are living beyond their means just to get on the the ladder. Although I doubt if rates will hit 15% anytime again soon, they could well get close to 8% and if you haven't allowed for this within your budget you could find yourself in a difficult situation.

Although house prices rise in the long term, sometimes they decrease in the short term and you could find yourself struggling to pay off a mortgage with negative equity.

what relavence does 15% have? don't forget IR's were naturally high anyway then so I would suggest an equivelent 'back breaking' rate now would be MUCH lower than 15%!!!

Gorgeous_George

ollyk wrote:

what relavence does 15% have? don't forget IR's were naturally high anyway then so I would suggest an equivelent 'back breaking' rate now would be MUCH lower than 15%!!!

I bought my first house and paid 16.5% interest. However, the house was below the MIRAS limit of £30K so the effective interest rate was 11% (I think tax was 33% at the time).

House prices will only fall if the higher interest rates are sustained for a long time. If they fall off at the end of this year, as many expect, prices IMO, will only fall slightly. That said, I won't be voting in this poll.



GG

Carter_2

Judging from the results, you will see (if you have voted) that none of us really have a clue as the poll result is much evenly spread! Pretty much how the other threads work out really in that we have opposing views and nobody knows (House Price Crash threads #1 - 31ish are we on now?) Just suck it and see is my advice.

fivemice

As a potential ftb, I must say its very frustrating to know what to do, whether we should hold off or just go for it. I think we will go for it though, we intend to buy a house that we will live in for the next 15 or so years at least, who knows what could happen by then.

Luckily we will be in a position in three years time to be able to afford 21% interest on a 15yr mortgage so I'm not too worried about rate rises, but my friends bought a house about three years ago at the top end of their budget and are always moaning that they are broke so they must be close to breaking point already which is very worrying.