House prices will fall another 4%

Graham_Devon

(Reuters) - House prices will fall another 4 percent before stabilising next year as a tough economy dampens demand and nervous sellers stay away, a Reuters poll showed on Wednesday.

The results of the poll of 23 market watchers, taken over the past week, will make grim reading for homeowners who bought their property at the height of the boom four years ago and have already seen around 20 percent wiped off the value since then.

"We suspect that consumers' squeezed purchasing power, tightening fiscal policy, a softening labour market and worries over the economic outlook will limit potential buyers and weigh down on house prices," said Howard Archer at IHS Global Insight.

"These factors are seen outweighing the support to house prices coming from extended very low interest rates."

http://uk.reuters.com/article/2011/09/22/uk-britain-house-price-poll-idUKLNE78L00320110922


Lots more in the article.

Pimperne1

Graham_Devon wrote: »

http://uk.reuters.com/article/2011/09/22/uk-britain-house-price-poll-idUKLNE78L00320110922


Lots more in the article.

"will make grim reading for homeowners who bought their property at the height of the boom four years ago and have already seen around 20 percent wiped off the value since then."

It will only make grim reading if they need to sell or remortgage otherwise they will be five years into paying off their mortgages during a period when rates have been at their lowest ever.

HAMISH_MCTAVISH

Pimperne1 wrote: »

have already seen around 20 percent wiped off the value since then.".

Only on the Halifax index, which even Halifax admit is unreliable....

Nationwide is down around 10% from peak, Acadametrics is only down 5.2% from peak. ROS is within a percent or two.

Regardless, it's more interesting that one of the forum uber-bears saw fit to post an article claiming prices will only fall another 4%.

Amazing how expectations have changed.:)

Pimperne1

HAMISH_MCTAVISH wrote: »

Only on the Halifax index, which even Halifax admit is unreliable....

Nationwide is down around 10% from peak, Acadametrics is only down 5.2% from peak. ROS is within a percent or two.

Regardless, it's more interesting that one of the forum uber-bears saw fit to post an article claiming prices will only fall another 4%.

Amazing how expectations have changed.:)

These polls are laughable anyway, most of the people questioned have probably never even been on an HPC website and have as much chance of successfully predicting the housing marked as, well, geneer.

Blacklight

4% before the end of this cycle and start of the next doesn't seem too far off the mark.

Turnbull2000

That's barely a dent. Compared to the rewards of ultra-cheap mortgages and continually rising rents, I'd imagine most owners and investors will remain very pleased.

Going4TheDream

Turnbull2000 wrote: »

That's barely a dent. Compared to the rewards of ultra-cheap mortgages and continually rising rents, I'd imagine most owners and investors will remain very pleased.

Even the 800000 (7.3% of all mortgagees) that are in negative equity... 10% drop will see that double. Not all rosy for some

Pimperne1

Going4TheDream wrote: »

Even the 800000 (7.3% of all mortgagees) that are in negative equity... 10% drop will see that double. Not all rosy for some

Again, negative equity isn't a problem if you don't need to remortgage or sell. Does provide falls hope for some though.

DervProf

HAMISH_MCTAVISH wrote: »

Amazing how expectations have changed.:)

You're not wrong.

I seem to remember, back in 2006, predictions of average house prices of ~£250K in the not too distant.

Turnbull2000

Pimperne1 wrote: »

Again, negative equity isn't a problem if you don't need to remortgage or sell. Does provide falls hope for some though.

Yup. Or they can either continue enjoying mega low mortgage rates, or rent it out and take advantage of record setting rents, future substantial capital gains and an inflation proof retirement income if they hold onto it long-term.

DervProf

Pimperne1 wrote: »

Again, negative equity isn't a problem if you don't need to remortgage or sell.

Correct.

So why do I get the feeling from the media that negative and equity are dirty words when put together (and the end of life as we know it*) ?


* Probably because of the constant message "property prices only go up".