House prices will fall 25% over next two years, warn Estate Agents

Zammo

http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3828108.ece

House prices could fall by 25 per cent if the credit crunch persists, with the market declining by 10 per cent this year and by a further 15 percentage points in 2009, a new study suggests.
The pain will be felt in all but the most exclusive postcodes, according to Savills, the estate agent.

Even the Estate Agents are predicting an HPC now. Of course, no sales mean no commission, so it's in their interests to get the message across that vendors need to reduce their prices.
:money:

brit1234

The vested interests are aways chasing the reality of price falls. There 25% fall will actually be far bigger simply based on lending criteria alone.

ManAtHome

Do savills specialise in the (crash-proof) "exclusive postcodes" or something..?

Or is it getting near "that time of the month" again (encouraging btl-badger to lean on el BankO d'Excess)...

trudiha

I understood 'could' and 'will' to have different meanings, is this another example of me not keeping up wiv da yoff?

Zammo

trudiha wrote: »

I understood 'could' and 'will' to have different meanings, is this another example of me not keeping up wiv da yoff?

That's right, you keep grasping at those straws.

:money:

trudiha

I'm in favour of house prices coming down. I know that house prices in my area are coming down; the link you provided didn't need embellishment. However, the fact that you seem incapable of not misrepresenting a simple statement undermines your argument.

brit1234

The simple fact is house prices are very overvalued and the market will correct itself eventually no matter how much you meddle.

IveSeenTheLight

trudiha wrote: »

However, the fact that you seem incapable of not misrepresenting a simple statement undermines your argument.

Its amazing how many quotes get misrepresented on here.
There are so many that you have shown here, adapt, highlight their personal interest instead of quoting as a balanced argument.

ianmr65

brit1234 wrote: »

The vested interests are aways chasing the reality of price falls. There 25% fall will actually be far bigger simply based on lending criteria alone.

No i think banks are risk pricing 25%, the imf have it at 27%, and the BoE have priced 22% haircut with the £50m, liquidity backstop, So i think 25% over two years is bang on, with the bottom in 2010, and a recovery to current levels over the next 2-5 years, after that ie 2012-2015

brit1234

ianmr65 wrote: »

No i think banks are risk pricing 25%, the imf have it at 27%, and the BoE have priced 22% haircut with the £50m, liquidity backstop, So i think 25% over two years is bang on, with the bottom in 2010, and a recovery to current levels over the next 2-5 years, after that ie 2012-2015

The IMF were quoting 30% overvalued a couple of years ago and that was followed by double digit growth.

25% fall will be too small a drop for people to afford especially when inflation is due to rise dramatically over the next few years (oil, Chinese wages, food, metals etc). People have far less disposable income as costs filter through. Interest rates will have to go up next year.

ianmr65

brit1234 wrote: »

Interest rates will have to go up next year.

I agree with the rest of your post, though think that inflation will be curbed by lower growth, demand and output. Much if not all the rising prices are being fueled (LOL) by speculation, as investors see agri, energy, and furl, as safe havens. + if you belive david smith (s. times) the agri businesses are looking to industrialise food production in africa, as opposed to leaving it to small holders.

Akso the west chucks a vast quanity of edible food . All in i don't think we are suffering from a lack of resources, rather badly distributed, and wasted ones.

In which case intrest rates will continue to fall. The 10 year fixes out there imply that the banks are pricing the same.