House prices to remain stable in 2012

HAMISH_MCTAVISH

Press Association-The "highly resilient" housing market will not suffer a slump in 2012 as many fear, but will instead remain subdued and stable, according to a forecast released by Halifax.

Despite the significant deterioration in the outlook for both the UK and global economies, the housing market has held up with the current average sale price of a house - at £161,731 - little changed from the end of last year.

The Halifax expects little movement in prices in 2012 - estimating a range of between 2% and minus 2% - but with the market set to be strongest in London and the South East, there are further signs of a north/south divide in fortunes.

Halifax's outlook is based on Bank of England interest rates remaining at a record low of 0.5% throughout 2012 and the positive impact this will have on levels of forced selling and in mortgage affordability for home buyers.

Martin Ellis, Halifax's housing economist, said: "This resilience in the face of very challenging economic conditions provides encouragement regarding the prospects for next year."

Officials noted that the rate of mortgage affordability for new borrowers was at its lowest point since 1997, having fallen from a peak of 48% of average disposable earnings in 2007 to 26% in the third quarter of this year, which is significantly below the average of 37% over the past 25 years.

Halifax said the favourable affordability position will help to keep down the numbers of homeowners forced to sell their properties because they cannot keep up with mortgage payments. When the number of forced sellers is high, there is usually a sharp fall in house prices, so this scenario is more likely to be avoided with an affordable interest rate.
However, the Halifax warned that demand for housing will be constrained by the weak economic growth and the prospect of high levels of unemployment led by large-scale public sector job losses.

Pressure on household finances is also likely to be a factor in subdued demand for housing as families continue to keep a tight hold on their purse strings and focus on reducing their debts.

Mr Ellis added: "Overall, we expect continuing broad stability in house prices nationally during 2012. Prices are again likely to end the year at levels close to where they begin with the market continuing to lack any real direction."

:beer:

Oh, and it seems the cost of buying a house is at it's cheapest since 1997. Despite prices hardly falling at all.

So have another :beer:....

SecondLegDownIsTheBigOne

HPI is over.

"You're a looney."

http://www.youtube.com/watch?v=2eMkth8FWno

Mallotum_X

What was Nationwides prediction again?

geneer

Halifax? Is it the 7th of January already?

Graham_Devon

Hamish.

You often state that raising interest rates will have little effect on house prices. Yet the whole basis of this forecast is based on this:

Halifax's outlook is based on Bank of England interest rates remaining at a record low of 0.5% throughout 2012

Everyone has stated that nothing much will happen until interest rates rise, and that interest rates are supporting the housing market.....to which you disagree time and time again.

This is what many of us have been saying for a long time now, and simply keep having to extend the time frame we are saying it for.

wotsthat

Graham_Devon wrote: »

Everyone has stated that nothing much will happen until interest rates rise, and that interest rates are supporting the housing market.....to which you disagree time and time again.

That's an interesting use of words. If you'd have said interest rates are supportive rather than supporting you'd have agreement.

If interest rates are supporting the housing market then that implies that many are teetering on the edge which isn't the case. Arrears are low and so are repo's. Increased rates are bound to have an effect but anyone hoping that an increase in interest rates is going to lead to floods of distressed sellers will, I hope, be very disappointed.

If you are hoping for more distressed sellers I'd be asking Santa for an increase in unemployment rather than interest rates. Maybe if you're really good he'll give you both.

Graham_Devon

wotsthat wrote: »

That's an interesting use of words. If you'd have said interest rates are supportive rather than supporting you'd have agreement.

If interest rates are supporting the housing market then that implies that many are teetering on the edge which isn't the case. Arrears are low and so are repo's. Increased rates are bound to have an effect but anyone hoping that an increase in interest rates is going to lead to floods of distressed sellers will, I hope, be very disappointed.

If you are hoping for more distressed sellers I'd be asking Santa for an increase in unemployment rather than interest rates. Maybe if you're really good he'll give you both.

Re-read what I quoted....or at least read what Hamish posted, as what you have just typed, is actually in the report.

Halifax's outlook is based on Bank of England interest rates remaining at a record low of 0.5% throughout 2012 and the positive impact this will have on levels of forced selling and in mortgage affordability for home buyers.

Therefore it's pretty loud and clear that Halifax believes low interest rates are keeping repo's etc at bay, and also holding up house prices at their current level.

In your desperation, you have to turn it around into me hoping people will get repo'ed, and that I may just get to see some people made redundant for a christmas present. Not oly is that childish, it's also pretty inslting. I was simply, and still am, looking at exactly what Halifax have stated. I haven't expressed any opinion on what I want to see. I have many times before and it's certainly never been making people redundant.

All I have expressed opinion on is that many have been saying this for ages. Interest Rates support the housing market.

You don't have to be particularly bright to work out that if the Halifax are suggesting if low rates continue, house prices will remain subdued....that they probably believe if interest rates go up, pressure will be applied and they would suggest house prices were to fall.....by what percentage we don't know.

MrRee_2

Interest rates will remain extremely low for many years.

Unemployment is a fear, not a fact for many.

Payrises are still running at over 5% per annum for almost everyone.

People are paying down debt at record rates, there is plenty of spare money in the system.

That spare money can be switched quite easily to house purchase when confidence returns.

With the above certainties, house prises will not fall ...... indeed, here in the South, they are charging away with themselves.

System

Halifax are stealing my trademark prediction. How can I prosecute?

homelessskilledworker

For anyone that has a broad circle of friends and walks out of his front door and mingles with the rest of the human race cannot have any doubt that 2012 onwards is going to be anything but a bloodbath. The "property bulls" on this board, and I use inverted comma's as I really do not think any of them really are property bulls, they are might as well finish off their posts with the word AMEN, because they are just hoping and dreaming.

And it is not like I am picking on property, in fact my analysis just takes into account a British economy that is going to be hammered with which an overpriced property market is just a small part of the equation, along with football players, jobs, pay, household items, holidays, fuel, pensions etc etc

I have no idea how much property prices will collapse by, but I am hoping it is no worse than 30%, even though I suspect great falls are quite possible

MrRee_2

homelessskilledworker wrote: »

property market is just a small part of the equation, along with football players, jobs, pay, household items, holidays, fuel, pensions etc etc

Football Players? I've heard it all now .......

Jobs - the fear is far worse than any reality

Pay - UP 5% for 90% of the population

Household Items - cheapest they have ever been

Holidays - we can all have holidays, camping is great fun

Fuel - we always find the funds to keep our cars running

Pensions - I, like others, are on Final Salary Schemes

So, basically, there is NOTHING to worry about ..... you hide under the bed with the other losers - us, the winners, are out there living it up!!!