Price Trends

PINGLEIST

The million dollar question I know but I would like pick the brains of those in the property game who contribute to this excellent site.

Where do you see house prices going in the next couple of years?

My thoughts are negative but I have been saying this for the last year or so only to see prices rise but lately at a slower rate.

I realise price trends will differ regionally but keep telling myself there are so many people in debt in this country sooner or later the pack-of-cards will collapse.

Will the recent rate increases really hit home?

Any thoughts gratefully appreciated.

chant1l

I would actually say that this question is one people stress and worry over and is the one question I am asked over and over and over. It is also propably the least important of any involved in a property purchase!
It is unlikely that you will buy today and sell in 2 years, so actually the market rate of a house has no bearing in your purchase process. Houses are generally bought for periods of 5 - 10 years during which time (and even during recessions/wars and crashes) the price will usually see an increase.
It just isn't a pack of cards.

PINGLEIST

That maybe so but historically there have been corrections. The last one as I remember was app. 1995/96 with the negative equity and all that, but since then prices have soared, what is driving them?

There are so many indicators offered like mortgage lending, house price indexes etc. it really is difficult to assess but surely the increases in rates must have some effect.

I have more experience with the stock market than property where corrections come along quicker and are normally predicted, houses on the other hand appear to defy gravity. This has to be a concern.

I would be sick as the proverbial if I bought now only to see prices drop, it,s alright saying the market rate has no bearing but even the hardened developer would wince a little.

The major indicator I have noticed is the drop in rental prices in the centre of Leeds, the local paper highlighted this a couple of weeks ago stating landlords are reluctant to ask for higher rents for fear the tenents up sticks and move on.

Gorgeous_George

House prices have been driven higher primarily by a sustained period of low interest rates. Couple this with unprecedented demand for housing due to (in no particular order) single mums, immigration, divorce, planning policy and probably more things to greater or lesser degrees.

Uncertainty over future interest rates should dampen house prices but, while the other factors remain unchecked, there will remain a need for houses and, while prices may fall, they are likely to remain just as unaffordable for many people.

IMHO, we need more houses to satisfy demand and ease the upward pressure on prices. I see no reason why new towns and villages should not be built on green fioeld sites. I would prefer this rather than seeing every scrap of space in towns and villages having tiny homes built on them.



GG

ashcarrot

Obviously theres the lack of housing but I predict we'll see the following signs on the way to the crash,

1. Rents Reduced - Over population of BTL's and the need to fill the house's they've bought.
2. Housing stagnation - Lack of BTL's entering the market due to reports of not being able to find tenants at a decent rate.
3. Mass increase of houses for sale (from the BTL)'s
4. House Price drop - Due to the supply and need of the BTL crowd (some FTB may have overstretched adding to thi)
5. This first drop maybe the major one or there may be a small drop, followed by the FTB who haven't been able to get on the market and been waiting may jump at this point creating another stabilisation / micro boom and following this the major crash.

Rebob

By the sound of it I am near yourself (south of leeds/north of sheffield). The prices remained stagnant for a while but there are lots that are buying here rather than in the cities as the houses are more affordable and there are load being built here.

I predict that prices will remain level or rise very slightly over the next 12 months.

Gorgeous_George

ashcarrot

You seem to have a fixation on BTL. I consider this to be somewhat irrational and your points seem to contradict each other.



GG

PINGLEIST

If Rebob is right then maybe the first signs are here already.

I can,t see any movement this side of summer but after one or two more rate increases adding to the ones we have already suffered things might look different.

What are your opinions?

Generali

I'm not sure that further rate rises are a given. I'm still bearish on house prices though. There's a bubble and bubbles end up popping.

PINGLEIST

Hope I,ve posted the link correctly!

Is this comment against the trend or the start of house prices in general falling?

http://www.smartnewhomes.com/content/Press_Centre/2034/New_Homes_Prices_Dip_As_Consumer_Confidence_Falters.aspx