House prices 2017/18

Jagraf

Is there anywhere I can look for a graph of house price predictions in 2027/18 - I know we can't see into the future but just to get a perspective.

Generali

Probably as good a guess as any:

http://www.savills.co.uk/resources/5-year-forecast/

Jagraf

Generali wrote: »

Probably as good a guess as any:

http://www.savills.co.uk/resources/5-year-forecast/

Thank you that's great.

Generali

Jagraf wrote: »

Thank you that's great.

No problem.

What I was actually looking for was the consensus forecast but laziness kicked in before I found it. Sorry. If you have a bit of a Google you can probably find it.

Jagraf

Generali wrote: »

No problem.

What I was actually looking for was the consensus forecast but laziness kicked in before I found it. Sorry. If you have a bit of a Google you can probably find it.

We currently rent and are looking to move areas from southeast to Midlands in 2017/18 when we should be able to put down about a 40% deposit (we are in our forties, ancient I know). I'm just trying to work out how much house prices are expected to change but obviously that's so difficult to predict at the monent.

Generali

Jagraf wrote: »

We currently rent and are looking to move areas from southeast to Midlands in 2017/18 when we should be able to put down about a 40% deposit (we are in our forties, ancient I know). I'm just trying to work out how much house prices are expected to change but obviously that's so difficult to predict at the monent.

In the long term, UK house prices tend to move with nominal GDP but year-by-year they tend to be pretty volatile.

The near future is likely to be interesting as there are competing factors at work pushing house prices up (demand side help from the Government and increasing competition to lend between banks) and pulling them down (BTL getting clobbered). Take your pick as to which will win.

michaels

You forgot to mention population growth continuing to outpace house building....

cells

michaels wrote: »

You forgot to mention population growth continuing to outpace house building....

its not just population growth its demographics changes.

Anyway the problem is not all that server in all areas. We really need regional statistics on the news (especially on GDP growth) because the national figures have kept things under the carpet and not so clear (eg London has been booming for 20 years while the rEngland has not so much and its only really after 20 years the government has half heartedly started talking about 'northern powerhouses')

Anyway, the point is that population growth is not evenly spread (whereas on a regional basis house building is more so). So what we found is that the north east experienced the lowest population growth and prices are down nearly 20% in NOMINAL terms in that region from a decade ago! So not only are homes 20% cheaper but mortgage interest rates are about half price so housing costs in the NE have truly crashed (yet I would bet a good number of the hpc crew hail from the NE and still cry prices are too expensive)

cells

Generali wrote: »

In the long term, UK house prices tend to move with nominal GDP but year-by-year they tend to be pretty volatile.

niet

Local house prices tend to move with local GDP

This is an important difference as the regions or even sub regions can diverge in GDP and that is one of the big reasons London powered ahead on house prices v rEngland as London GVA powered ahead and is still expected to do so in the short and medium term

kilby_007

Over the last 15 years in our area the house prices have almost trebled, whilst salaries have only risen by 1.5 times. To put that in perspective, someone in 2001 earning £25K could (just about) afford to buy a £100K 3 bedroom house, but now 15 years later, someone doing the same job and earning £37.5K will not be able to buy the same house, now costing £300K. If the house prices have trebled again in 15 years time, then barely anybody will be able to afford a house and rental prices will be at the mercy of the 5% of people who can still afford to buy.

In my opinion the property market is on a knife edge. If supply is increased by building a lot of new homes very quickly or demand is cut in some way, then the prices will come crashing down, but if both of those factors remain unchanged then we might just see a slow steady increase in prices regardless. There are of course other factors at play - foreign investment is dropping so that could be a fairly big factor at play, and sentiment from the Brexit campaign and the media influence, it could be an interesting couple of years!

economic

why have prices gone up? Simple answer: inequality. It does not matter about average wages. It's irrelevant. What matters is there are enough people who can afford. And whilst prices rise then there must be enough people who can afford as they are pushing prices up. Whilst average wage earner gets more and more priced out. This is inequality rising. Prices correlates very well with inequality.

Look at cities like Mumbai and Yangon. Property prices there are crazy relative to average wages. Same reason as above - inequality. It's just that in Mumbai and Yangon the inequality is a lot more obvious then in London because the problem is a lot worse.