We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

Debate House Prices


In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Longest fall in housing market since records began

House prices will not return to their pre-crisis peak until 2019, making this the longest fall in the housing market since records began, a report says today.

It predicts that prices will drop in every region next year, with Wales and Scotland among the worst hit.

The report, from the estate agency Knight Frank, says prices peaked at an average of £183,959 in 2007 but have fallen so dramatically that they will not return to this level until 2019 at the earliest.

This 12-year recovery period is the longest since records began in the 1950s.

The report says the recovery is even further away if inflation is taken into account. If the increases in the cost of living are also considered, the date slips back to 2031.

During the last housing market fall, prices peaked in 1989 at £62,782 and did not reach that level again until 1998.
http://www.thisismoney.co.uk/news/article-2228697/Halifax-index-House-values-fell-1-000-October.html

It's just another report. Whether it's right, wrong, or how close or far off it is to the truth we won't know for some years yet. But if it's close to the truth, which it may well be, it could see those intending to hold out for a recovery waiting a hell of a long time.

The reason I agree with the overall sentiment of the report is I just ask....where is the money going to come from to raise values? We can talk all day long about the reasons that might put an upward pressure on house prices, such as populaiton etc....but unless theres the money to pay for it, which I can't see over the next few years, it's all a bit academic.

What stands out to me is the masisve divide in terms of years now between a nominal and inflation adjusted recovery.
«134

Comments

  • Carl31
    Carl31 Posts: 2,616 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper Combo Breaker
    Good point about the money, all the time this country is in recession, there is no additional money to transfer into assets
    As GDP increases, so will wage, and then so will house prices. All the time that incomes are being squeezed as they are, it will just be a stalemate between cost of living expense and investment of any description, with gradual increase/decrease on either side
    Something needs to give to get us out of this stalemate, Export to the east where all the money is
  • Percy1983
    Percy1983 Posts: 5,244 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Well this can only be a good thing for all involved who want houses for homes, those who want investments may not see it as good but hey all investments are risks.

    Hopefully wages will catch up with prices and then prices will increase slowly with inflation, yes prices will always go up as do wages, but the growth shouldn't outstrip wages.

    Lets just hope we don't forget the lessons we have learned and bring back lax lending.
    Have my first business premises (+4th business) 01/11/2017
    Quit day job to run 3 businesses 08/02/2017
    Started third business 25/06/2016
    Son born 13/09/2015
    Started a second business 03/08/2013
    Officially the owner of my own business since 13/01/2012
  • wotsthat
    wotsthat Posts: 11,325 Forumite
    Longest fall in housing market since records began is probably technically correct but a little misleading - the Halifax graph in the article clearly shows a straight line from 2009 to date.

    An interesting forecast though. Say prices return to their nominal peak in 2019 that would imply average growth of c2.6% per year for 7 years i.e. the straightline continues.

    Bad news for anyone expecting/ hoping for a boom/ crash but a decent compromise for most.
  • yeah, so 9 years for 90s HPs to regain their full late 80s 'glory'.

    how long this time around? with low wage inflation & banks still rebuilding their balance sheets, even with ZIRP, 15 years seems very easily possible. is 20 too fanciful?? hard to say.
    FACT.
  • While prices remain stable renters still pay rent!!!!!!!!!!!
  • ruggedtoast
    ruggedtoast Posts: 9,819 Forumite
    While prices remain stable renters still pay rent!!!!!!!!!!!

    Renters are the squeezed salami that is for sure.

    I don't agree with it.
  • Percy1983
    Percy1983 Posts: 5,244 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    While prices remain stable renters still pay rent!!!!!!!!!!!

    Very true, but with houses becoming worse investments there will be less 'investors' coming in and maybe even some dropping out.

    All we need now is rent controls and all will be fine.
    Have my first business premises (+4th business) 01/11/2017
    Quit day job to run 3 businesses 08/02/2017
    Started third business 25/06/2016
    Son born 13/09/2015
    Started a second business 03/08/2013
    Officially the owner of my own business since 13/01/2012
  • ukcarper
    ukcarper Posts: 17,337 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Seems likely to me unless something changes I could easily see it taking longer.
  • wotsthat
    wotsthat Posts: 11,325 Forumite
    Percy1983 wrote: »
    Very true, but with houses becoming worse investments there will be less 'investors' coming in and maybe even some dropping out.

    All we need now is rent controls and all will be fine.

    This is a forecast of prices increasing 2.6% year for 7 years. If there's a rental yield of 5% as well that doesn't look too bad.
  • mystic_trev
    mystic_trev Posts: 5,434 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    It predicts that prices will drop in every region next year, with Wales and Scotland among the worst hit.

    Don't tell Hamish ;)
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245K Work, Benefits & Business
  • 600.6K Mortgages, Homes & Bills
  • 177.4K Life & Family
  • 258.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.