House prices will fall for the next five years, a think tank has predicted.
The National Institute of Economic and Social Research says prospects for the housing market are 'very weak indeed' and that the slump will be the longest period of falling house prices yet seen.
It is predicting house price falls of 4.5% this year and 10.5% by the end of 2015, indicating that actual falls would be greater once inflation is factored in.
Another economic think tank, Capitall Economics, said the Institute's forecasts were still too optimistic. Paul Diggle said: "The housing market is not going anywhere at the moment. We think the housing market has considerably further to fall. Prices are over-valued to the tune of 20%." He said the 'yawning gap' between house prices and earnings needs to be closed by falling property prices.
Meanwhile, lending rose less than expected in March, the Bank of England said this week, as lenders continued to exercise the equivalent of a financial hosepipe ban.
Its data showed that growth in net unsecured consumer lending slowed to £0.1bn in March, well below the £0.45bn increase that had been forecast. Net mortgage lending also rose less than expected, with a £0.4bn increase.
Mortgage approvals were, however, up, and at 47,557 in March, were the highest number since November. But even this was a little less than the 48,000 predicted and down on the figure for March 2010, when the number was 48,967.
The number of remortgages approved fell to 32,116 from 35,567, though that was a 23% increase on March 2010.
Meanwhile, the latest figures from the Land Registry reveal that the average house price in England and Wales now stands at £160,996, an annual price decrease of 2.3% and a monthly fall of 1.1%.
High annual falls in house prices outside London – for instance, 9.1% in Stoke on Trent and 10.9% in north-east Lincolnshire – were countered by 0.8% growth in London. In Blaenau, Gwent, prices have fallen by over 19% in the year.
Even in London, the house price figure is distinctly patchy: in Islington, house prices have risen 7.7% between March 2010 and March 2011, but in Bexley, they have fallen 2.3%, and between February and March this year, house prices in Hackney fell 1.8%.
The latest data for transactions goes up to only January and shows that between last October and January, transaction volumes averaged 51,548 per month – a decrease from the year before, when monthly volumes were 60,284.
Paul Hunt, managing director of Phoebus Software, which supplies the mortgage industry, said of the Bank of England’s lending figures: “It’s a relief to see mortgage lending increase at all, but the £400m rise is only half what would be expected if lending remained at its six-month average.
“In truth, the mortgage market is flourishing as much as the wilting gardens of south-east England. Lenders are showing a stubborn reluctance to lift the financial hosepipe ban and there seems little prospect of this changing before the full impact of the threats of growing unemployment and rising interest rates is known.
“We must hope as the year progresses that continuing economic growth convinces lenders to open the taps – otherwise what is currently a semi-arid lending market could become a desert.”
Of the Land Registry data, Hunt was equally downbeat, saying: “House prices are now at their lowest level since November 2009 and are only 5% higher than the four-year low seen in April 2009. What’s more, the speed of the drop is increasing.
“This was the largest monthly fall for two years and could be an indicator that the difficulty of obtaining mortgage finance is beginning to have a pronounced impact on property prices.
“It seems that the post-recession recovery in the property market is now over, and until lenders are prepared to increase the risks they take with borrowers, there seems little likelihood that prices will recover.”
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Comments
@WoodenTop
So, I didn't say anything about going back 20 years then.
In 19997 I had a holiday in Budleigh Salterton in Devon. Similar 2 bed terraced cottages to the one I stayed in were on the market for 60k. My wife and I daydreamed about owning one and being able to escape.
Those cottages are now on the market for 300k.
In places like Liverpool, Newcastle, Leeds and Manchester, the price of 2 up 2 down terraces increased by as much as 500% (from 20k to 100k) between the late 90s and 2007/8. If the property market halves in those areas - we'll be winding the clock back 7 or 8 years. In fact, in those areas, prices are already well down - but nowhere near down enough for people on average wages to buy.
As for your comment about interest rates not affecting house prices - I really don't know what to say about that.
If base rate went up to 5% and mortgage rates go up to 8% people will have to offer less when buying a property because they won't be able to afford the repayments. As for your comment about 'if you can't afford it, don't have it' - that's the point I've been trying to make.
If the majority of the population don't earn enough money to afford the houses their parents owned - in what way is the property market sustainable?
You're all sleepwalking and hoping things are going to miraculously pick up. Well I have a little prediction. Transaction levels are going to go down and down each year as the supply of cash buyers dries up.
Maybe we are in a new paradigm where 200,000 houses a year are bought by investors and gradually the UK housing stock becomes mainly rented.
Of one thing I am certain, in many areas of the country the majority of people who are between 25 and 35 now - will never own a house.
@RnR
By no means would I consider myself smart money, I simply like to spread it around a bit. Bought shares heavily from mid 2008 until early this year. Solid companies, nothing flash and mainly chosen for dividends circa 5%. I intend to buy and hold but have made capital gains of around 30%.
There are a lot of amateur, watch-too-much-telly, "the tennants pay your mortgage", no-clue-about-inflation mugs into property at the moment.
Mike - you cant just pick a property and tell me I am wrong! or two, I am just saying there are BTL opps out there!
Obviously not every property is a good BTL....
If I pick one property which has sold for more than it did in 2007, does it mean the price drop theory is flawed?
This article from the investor magazine Money Week offers a good summary and interpretation of the most recent house price data.
Warning - the title 'Britain's housing market is an unexploded economic bomb' suggests those of a nervous disposition, recently acquired BTL portfolio, vested interest in high house prices, IO mortgage etc may not want to read it. I'll see if I can find something instead to post about the joy ostriches find when they stick their heads in the sand.
http://www.moneyweek.com/investments/property/uk/britains-housing-market-is-an-unexploded-economic-bomb-11906?utm_source=newsletter&utm_medium=email&utm_campaign=Money%2BMorning
You may very well be right if they are trying to sell now after purchasing in the last ten years as any captial growth is probably washed out. But long term and income in the meantime is still a good bet if were near bottoming out on prices. Depends if you want an annual yield or long term captial growth which may take longer?
I've said it before here and I'll bore everyone by saying it again - the smart money has moved out of property. Much better returns in recent years have been had in stocks, gold and precious metals.
Only amateur investors are eager to snap up BTL opportunities in the present climate of falling prices - those few that aren't already in financial trouble or with existing portfolios.
The trouble with this site is that too many so called experts who think they know about estate agency come onto EAT to preach their wisdom. No answers to the problem of the today just what they think and takes up alot of working time sifting through.
MW Yes you did if you look at your comment, because that is what your talking about would happen. Were already at 2002/3 prices another 10% will possibly take us into high 1990's and probably the bottom line, any further reduction will take us down to mid 1990's and were now approaching 20 years.
As for interest rates, they do not effect house prices. They do effect affordability, please don't get confused with the two, they are different. If people can't afford it, as my grandmother said "you can't have it". If interest rates rise they will make affordability difficult for some, prices wont crash to the bottom of the barrel.
@Ric
They don't sound that savvy to me. An 8% gross yield is a pretty cr@p deal.
@Ric
You said:
"It does not matter how cheap properties fall the cash buyers will alway get there before the FTB's"
Are you under the impression there is unlimited cash around? People who are really loaded can't be fagged to manage a BTL portfolio. The big growth in BTL over the last 10 years was caused by the credit bubble.
Sure, some people have some cash on their hip - enough to buy one or two properties. This is going to run out one of these days.
You sure you've got your numbers right?
3 bed semi - £600 a month
http://www.rightmove.co.uk/property-to-rent/property-32810201.html
1 bed flat - 100k
http://www.rightmove.co.uk/property-for-sale/property-27827782.html
@Mike Wilson you say "There are very few opportunities to invest cash in property and get a decent return via the rent. BTL investors have been relying on capital growth and they ain't getting any of that in the next x years"
Nope do not agree! The market with its current doom and gloomers is actually creating some pretty good BTL opportunities as vendors nervously accept low cash bids. (well around us they are)
Stockport Area is great for them at the minute Ive just put a 2 bed terrace on you can buy it for £80k needs about 6-10k throwing at it and you will rent it for fun at £595pcm.
We have hardly any BTL stuff available as savvy investors are pinching all the cheaper FTB stuff.....perhaps this is the way to help FTB! Limit how many BTL properties you can buy for a couple of years?
It does not matter how cheap properties fall the cash buyers will alway get there before the FTB's!
It's the VEBRA ad that is causing the constant postbacks to a server.
@WoodenTop
You said:
"MW I'll bite for once, stupid comment. History hasn't passed me, when did property prices fall to value of 20 years before? Interest rates won't have that much of an effect on property values in general."
Who said anything about property prices faling to their value 20 years ago. Did I say that? If I did I must have been temporarily deranged.
First time buyers that can enter the market are few and far between. If interest rates rise - even just a couple of percent - they will become an endangered species. As it is the average age of a FTB is 38. With interest rate rises they'll be 48 before they can afford to buy.
And, one of these days the cash buyers are going to run out of cash. There are very few opportunities to invest cash in property and get a decent return via the rent. BTL investors have been relying on capital growth and they ain't getting any of that in the next x years.
Maybe we'll get down to 200,000 transactions a year in a couple of years.
Someone needs to fix this forum (and I don't mean getting rid of me.) One of the ads on this page is constantly going back to the server - something to do with ....open-x .. angels group?
MW I'll bite for once, stupid comment. History hasn't passed me, when did property prices fall to value of 20 years before? Interest rates won't have that much of an effect on property values in general.
Once you get to the average Joe value going under 20 year value that just about takes out all the people in the country with a mortgage from selling as they will mostly all be in negative equity .......... won't happen for so many reasons (this post would then be an all time record).
Johnson - you are showing a red rag to a bull there. I'll restrain myself, but others might not.
Blimey, even the Daily Express is getting in on the act with:
HOUSE PRICES DIVE BY 1.4% IN APRIL
Is EAT the last bastion of sanity?
It will be interesting to see what happens when international investors realise that the UK cuts are an illusion (government spending is scheduled to rise every year throughout this parliament) and start putting the squeeze on - when they'e finished with Greece, Ireland, Portugal and Spain. Just imagine if the UK was having to pay 8% to finance its debts.
Someone said the housing market has a floor and we're nearly at it. Obviously the lessons of history have by-passed that observer. If base rates go up to even 5% - this country is monumentaly screwed -such is the size o government and consumer debt. And, history teaches us that when these things happen they happen suddenly and surprise all the 'experts'.
James - we're not quite up to the dizzy heights of 134 posts achieved on a thread last week.
My goodness this has been a popular thread
And of course stories like this fuel the don't buy now debate. Not good for anyone in the industry and linked business's.
Blimey keep taking the tablets ladies and gentlemen! Now back to the lead story.
I can't see house prices falling for the next 5 years, regardless if they should. As were already approaching 2003 prices in some areas (been to Blaeneau some years back and no suprise why it's so cheap) I cannot see prices falling back to 1990's values. The number of people that would drag into negative equity ....... well horrifying to consider and the death nail for many an estate agent, as sales would drop well below break even.
I predict they will fall by 10% by end of year for those that can afford to. Those that don't will join the vast numbers of sellers who are already left behind with 2007 prices.
Over the next 5 years will become stagnation with those that either cannot afford to drop, can't drop or won't drop and they will wait for the buyers to catch up, many regrettably waiting 10 years plus. There is a bottom line for values and were not far off it. Sadly the poor will never be able to afford to buy and has been the case for decades (just more of them year on).
@Brit1234 (aka brAt1234)
LOL? bless that actually does show everyone here that some of the "HPC" promoters have no actual "grown up" reason for wanting prices to fall.
You sound a little vendictive in your post, atleast some of the HPC commentators show a valid reason for their thoughts, you just go ha ha I hope prices drop ha ha!
Have your parents not put a block on you using the internet so you dont find yourself on the wrong website.
What happened to the spring bounce?
Lets hope these price falls continue and to think this is the peak time of the market. lol
Even though interest rates aren't rising at the moment I think the wage freezes and high inflation will help house prices down.
Are distressed sales picking up?
-3.7 yoy is good news today.
Halifax data for April: -1.4% MoM, -3.7% YoY. Seems to back up the Land Reg numbers.
@MikeWilson
Mike, why are you rattling off the "Do you think" list?
Can I not simply do my job without caring about whether the prices will go up or down?
Should I care whether people need big mortgages or small ones?
Should a train driver care which route he is on that day or the dentist care what race his next patient is?
No, no, no! Why worry about something you can't control.
There are people dieing in Libya right now too! I actually care about the people there, but there is little I can do about it and my day carries on like the day before.
You clearly care about it, enough to come on here spouting off about it day after day like some kind of preacher/ Jahovah Witness trying to force opinions on everyone else! Give it a rest mate.
My job is to market houses. The selling price is decided by the buyer. If the price is right, it will sell, too high and it won't. I can't control what the sale price will be or how big the mortgage will be, nore do I really care.
People do what they want when it comes to buying/ selling a house. No one has a gun pointed at their heads! It seems to me that because you can't actually preach at the vendors who are trying to sell, or the buyers that are out viewing houses, you come on here like a scratched record and go on & on at the estate agents, who cannot do anything about it and probably don't care anyway.
I'm sorry you feel so strongly about everything, but may I suggest you take a chill pill, find yourself a nice hobby and let us get on with doing our jobs, which is advertising a product, property! I'm sure you won't listen though!
Dear Admin, do we really need to put up with people that are only here to preach at us/ blame us? Is there anything you can do?
Brit1234: "I think you have the wrong person there, not after a 3 bed semi in the west midlands at all. Far from it. "
Oh, yeah - my mistake. It's EAST Midlands, ain't it? Got your 'wish list' confused with Sibley's...
Like you say, "far from it".
SORRY, Sibley's...! Didn't mean to offend, mon ami...
"I will buy when I want too and as this article says house prices are going to fall for years." Big deal. Believe EVERYTHING you read? Nostradamus says the world will end in 2012. You will therefore see out your days in rented.
Might as well spend your 25% of something deposit, then...
PEEBEE "You want - quote - a three-bed semi in the West Midlands. WHY?? If you are the struggling FTB as you claim to be, why do you want a family home?"
I think you have the wrong person there, not after a 3 bed semi in the west midlands at all. Far from it.
I will most likely flash my mortgage in principle at a EA and say I have my 25% deposit (your right on that one) but that's it. As you said you work for the seller not us buyers so don't expect to see any more of my hand.
I will buy when I want too and as this article says house prices are going to fall for years.
@MikeWilson
Errmm Not sure you can call people wanting house prices to fall Optomists!
Where do they need to fall too? and when they get there and the Optomist you talk of purchases the house they want, will they then hope they fall a little more? and remain "Optomists" as you call them.
The word optomistic on the whole is to want better or think better? To "fall" is on the whole a negative word with negative meanings and to "rise" a positive so a true "Optomist" would only ever want a positive outcome!
Oh and Mike a Realist is "a person who accepts the world as it literally is and deals with it accordingly" Therefore perhaps as spokesperson for the "realists" in your world tell them that house prices "HAVE NOT CRASHED" nor do we know if they will again and they must now make the best of how the world is today and get on with it. You are trying to promote an event not report on a fact!
And perhaps tell your followers to stop getting iphones and iPads at £50 a month, Sky at £52 a month, Fags at £5 a packet, wearing D&G or Raplhie clothing, stop driving a better car than they need, going out Thurs to Sunday as all their mates are and start SAVING a bit earlier, imagine the thought of saving? Staying in for a whole year to be able to buy a home, or driving a second hand cheap car or having a pay as you go mobile with a strict no more than a tenner a month policy....imagine if we started to teach the mind a bit differently that what you put in you get out......rather than you can afford to buy only when prices at there lowest....no-one would ever buy again, as only £1 or Zero is the true Low!
I bet most true sprited Optomists own a house if not two and work hard and play hard because they beleive they can! For those who cant buy and never will be able to buy we have the happy balance that is Lettings! and allows the Optomists to buy another house so the most "optomistic" of the cant buy people can choose Private rentals rather than council housing.
Mike you sound like you are running a Cult of some sort where you are going to lead your clan to the edge of a cliff so you can say I told you there would be a fall (a few EA's will possibly help you over the edge I reckon)
If prices fall, they will then rise afterwards and then no doubt fall again, our children will carry on this debate for years to come (none of which will have a 100 year mortgage though - get a grip! Doh that just shows your ambition to moaN! moAN, MOAN!)
@Chris
You said:
"I come here to learn of changing developments in our industry like HIPs, EPC's, regulatory changes etc. and the last thing I need to hear are all the doom mongers that have nothing to do with our industry, doing their upmost to talk the market down."
Man, do you live in a parallel universe? Do you seriously think that, for society as a whole, the house price boom between 1997 and 2007 was a GOOD thing?
Do you seriously think that having a generation priced out of house ownership is a good thing?
Do you seriously think that people taking on massive mortgages (at historically very low interest rates) is a good thing?
Do you think it mght be a better thing if mortgages were much smaller and people had more of their take home pay to spend - creating demand and jobs instead of paying interest to bankers?
Do you think current house prices are sustainable?
Do you think young people now who, in 10 or 15 years time, will be average people on average salaries will ever be able to afford an average 3 bed semi in a not particularly pleasant Outer London suburb at £375k?
Do you think people paying high mortgages is better than people having some money available to put into their pensions?
I mean, whichever way you look at it, the house price boom has been a DISASTER. It led to a banking crisis and the government taking on debts young people will be paying off in 50 years.
Yet you call anyone who wants house prices to fall a DOOM monger. Yet, in fact, anyone who wants house prices to rise is the real DOOM monger. When will you be happy? When every penny of every person's take home pay is spent servicing their mortgage? Where then? Oh I forgot - the next step is 100 year mortgages. On boy, now we really are into the realms of DOOM - DOOM - DOOM.
People who want house prices to fall are optimists and realists. They want people to have to spend less putting a roof over their head so they have more money to enjoy life (and create demand and jobs in the process). Visionaries and optimists every one of them - including me. I want a better world for my children - not your doom laden scenario of ever rising house prices.
@Ray Evans
You said:
"Some stats and opinions may or may not be true or the forecasts drawn from them, but why help to perpetuate HPC - and help destroy your own firms and livelihoods?"
Errr, I think you'll find the House Price Boom is what is destroying your firms and livelihoods. Stable house prices - moving in line with (wage) inflation - with lots of transactions taking place - is surely good for agents.
Now we've had the boom the only way to get back to a stable market with a decent level of transactions is a house price crash. Or 20 years of what we have now - a stagnant market - with gradual price falls in most areas - and very low transaction numbers. Are you happy with this?
In 1996, I left the RAF after 12-years of service. I played my part in various parts of the world including active service during the first Gulf conflict. When people asked me what I did for a living, the answer went down well. By chance I landed a job as an estate agent. This didn't seem to go down as well with people when I was asked what I did!! I was the same honest, hard-working person with the same values and repect for people and this country, yet I was tarred with the estate agent stereo type! Fortunately, I have stuck to my principles, not once drifted off into doing anything untoward including turning down bribes from buyers!!! In short, I play it straight and am motivated by self respect, so forgive me if I get arsey when I stand accused alongside the bankers for causing the current mess and that high house prices are my fault and that of people like me!
Blame the greed of vendors or the demand for property caused by buyers fighting among themselves, but don't blame the guy in the middle who's main function is to take some photos to market the property so buyers can find it and negotiate a sale attepting to find the price that both a buyer is willing to pay and a vendor is willing to accept!
rantnrave: Firstly, you certainly do not have to thank me (or, I would say, anybody...) - but the thought is nevertheless accepted in the spirit it was intended.
HPC, however, owe you and our other mate, Sibleys'... a debt of gratitude. Were it not for you guys bringing intelligent reasoning and willingness to debate in adult fashion over from their Forum to here, then there really WOULD be a 'them and us' standoff. The problem as I see it, is that certain 'militants', many of which are probably nothing to do with the actual HPC movement are lumped in by association. It is THESE individuals that get - and thoroughly deserve - all the flack they get. NO-ONE should expect to enter a lion's den waving a sword dripping blood and not expect the residents to bite a chunk out of them!
One thing I can tell you (but I guess you've already sussed this out yourself...). Estate Agents - the good ones - not only care PASSIONATELY about their profession, but are also ready to jump to its defence and fight hard. And so they should. Before my foray into the world of Agency, I was of the belief that they were a bunch of sharks - mainly because most of those I knew WERE! In almost sixteen years as an Agent I realised that although some sharks do inhabit the waters, the vast majority are honest hard-working individuals who really care for their customers - and by customers I actually mean sellers AND buyers. The buyers of today are the sellers of tomorrow - it makes sense therefore to treat them well.
Not only do you make debate interesting, rant - but you bring ideas to the table instead of simply banging the HPC drum. We need to work on your last offering. it has merit. How do we go about it? Maybe Rosalind will give you a blog page and we will see if you can beat Mr Hendry's 508 posts!!
Have you thought of a career in Agency? SERIOUSLY! Best way to make change is from within, mate... ;o)
Lastly - thanks for the welcome message on the HPC site!
You cheeky monkey, you... ;o)
A rich man once said to all his economic advisors, 'if all of you are so smart, how come you are working for me?'
Why is HPC and EAT portrayed as us versus them, black and white etc? There are EAs posting thoughts on this very thread that could be found just easily as on HPC.
There are more than a handful of EAs who post on HPC and their contribution is welcome - it is after all a discussion forum, not an advocacy one. In fact, here's a thread about an EA who in a weekly newspaper column about property promoted the HPC site to readers!
http://www.housepricecrash.co.uk/forum/index.php?showtopic=163328
From what I can see, this is the only new thread here that HPCers have appeared on, and they aren't in the majority of posters. I don't see us posting on threads related to say the costs of advertising on Rightmove.
The view of property only ever going up in prices has been fed to the British public 24/7 for over a decade. Given that we remain in the worst economic downturn for nearly a century, I think other points of view that question this need to be given a free hearing.
(pulls out soap box...) I defend the right of those points of view to be aired on any related internet forum, but like all posts, they should be presented in a way that is repectful to others who may disagree. I wont defend HPCers who come here trying to pick a fight, but to be honest, the most bitter exchanges I have seen on EAT have been between EAs! To finish another dull monologue, I would like to express my gratitude to the likes of Jonnie, Pee Bee and even Chris for testing my views and giving me the chance to think them through to a deeper level. Here's to hoping we can learn from one another!
What a load of doom mongering rubbish from the usual source of doom mongering rubish. And why are capital economics always so negative about the property market? Because it doesnt suite their business for people to invest in property when they would rather people invested with them insead. Talk about the self interests!!! Yet the media still quote them and Jonathan " I still share a room with my brother" Davies.
Peebee, I fear you are wasting your breath (or typing fingers).
If any of the HPC'ers would hand on heart answer the question of Would they want the best price for their own house should they "Have" to sell for any reason? (Humour me and pretend (we know you can) that you actually need to sell a property, would you allow me to sell your house for less than the very same property has just sold for around the corner only last week because you personally feel the market is falling and you want to do a buyer a favour?
And would the HPC'er explain their answer be it yes or no, so I can understand and comment back!
Lets just pretend I am valuing your house for you today! The one around the corner, same house as yours, same size, same compass aspect no diference at all. I just agreed a sale at the asking price £200k and survey has been done all clear, no problems. PS It sold within a few days, two people bid, one actually bid higher and would pay £210,000 and would be desperate to know if the sale falls through or another simliar house comes to the market (ie yours) I share this with you at valuation stage as I now beleive as an agent (hate me or love me for this) that you should ask £210,000 just on the off chance the one around the corner showed the potential to get more for the next same house I marketed and doing my prescribed job as an agent to get the best possible price for "my client".
To any HPC'er - What would you instruct me to do?
Brit1234: "I think these forums are the perfect opportunity to lobby estate agents to get them to see our struggling FTB point of view and point the economics of it." How do you expectAgents to see your "point of view" when, on this site, you FLATLY refuse to give ANY detail relating to your needs or position. You want - quote - a three-bed semi in the West Midlands. WHY?? If you are the struggling FTB as you claim to be, why do you want a family home? You state you have a 25% deposit - but apparently not 25% of what you need to buy your preferred house (erm... so you DON'T have a 25% deposit, then...). Thanks for that wealth of help. Make an agent's job harder again, won't you!
Your 'lobbying' is sure winning you votes, pal. Keep it up - and perhaps your great-great grandchildren will read back and realise your head was full of magic, and buy a property just to spite your memory.
"We just want you to be a little more realistic with your pricing and offers. If you help us out, we can help you out and transactions will increase which is good for every one."
THIS is where all you HPCers, MSEers et al fall majestically at the hurdle. You just don't get it, do you? And regardless of how many times it is pointed out, you simply choose to ignore and bang on once again. But here it is again. IT IS NOT AN ESTATE AGENTS JOB TO GET YOU A CHEAP HOUSE! It is an Agent's responsibility, under The Estate Agent's Act 1979, to work in their client's best interests to secure the best possible price for their property.
You want an Agent who will listen to your cries? Employ a Buyers Agent. They like people who want cheaper houses. They will use all their skills to get you a reduction on an asking price (which you already say is too high) and charge you a nice fee for doing so, thus reducing the 'saving' you could make by simply making the offer yourself.
(you might need to give them some more info, though...)
@Brit - Chris as hit the nail on the head on more than one point - Inparticular the bit where it is clear many of the HPC promoters seem to have a simple reason for why they wish prices to fall and it is not to let FTB's buy the cheapest property...rather pinch BTL deals forcing FTB's into rented for longer period and no doubt at the height of the next cycle you may sell it for a huge mark up!
As for the good agents not driven by having to acheive silly listing targets they will just get on with the job in hand and have no doubt already talked about any price corrections needed on unsold stock, we even do that in an upward market aswell when it is needed! I cant imagine anyone agent has read this thread and thought Bloody hell the market is not as busy as it used to be I wonder why.
To be honest I dont reduce many property prices, I just encourage offers, you know the best form of reduction, it means you dont end up lowering your asking price and taking less again!
Brit, nothing is going to change asking estate agents to do anything differently. They value property the way they do to win the business from the vendors. A good estate agent without the pressure of targets will win the business and get the properties onto the market at the right prices, but the bad estate agents with huge pressures will give in to the vendors desire and stick a big price tag on it. This is just human nature. The struggle for that agency to survive. Once they have trapped a vendor with a long contract, the agency will be working on the vendor for months afterwards to get the asking price down to the correct levels.
Asking agents to do things differently is not workable, so you are wasting your breath. People blame the agents, but the agents don't decide the value of something, the buyers do. If something is too expensive, it won't sell, period. In the future, long after estate agents no longer exist because joe public will list their homes on sites like ebay, you can then just blame the vendors can't you!
Talking on here about what the government should do or not do also is a waste of time too. Speak to your MP's and see if they listen!
The market is governed by market forces. Too many buyers and not enough properties will result in price increases and visa versa. Why do you want to buy anyway? Just rent somewhere for the rest of your life! It's people that want to buy like you that compete against other FTB's and drive house prices up. If everyone chilled out and was happy to rent, houses would be a little over the cost of building them in terms of raw materials & labour. Its people like you that drive prices up, so please stop blaming the agents and I stand by what I said earlier, this is a site for members of the industry to discuss policy changes, legislation, marketing strategies etc. and not the constant subject of house prices. It's getting boring and there is little we can do about it anyway! If there is, why are prices going backwards?
Hi Chris, I'm not a HPC member but a MSE member. I too think house prices are vastly inflated and unaffordable. I have a large deposit and just saving a few more thousand for extra costs.
I am glad that house prices are falling again and believe this will continue. I think these forums are the perfect opportunity to lobby estate agents to get them to see our struggling FTB point of view and point the economics of it.
Surely you must realise these high house prices are unsustainable. We just want you to be a little more realistic with your pricing and offers. If you help us out, we can help you out and transactions will increase which is good for every one.
To all of the House Price Crash website people on here, please stop banging on about what you want to happen or what you think will or won't happen, because we don't really want to hear your scratched record views anymore!
I have just spent the last 6-days trying to debate sensibly with the usual HPC posters on another thread on this site and just when EAT put some fresh threads up and I think it will be safe to concentrate about other topics, the same old faces start delivering exactly the same massage in another thread, virtually word for word!!!
It's getting boring now, we have heard it time and time again so please go back to your chairman Jonathan Davis, pat yourselves nicely on the back for a job well done and agree with yourselves on your own website away from people here that have jobs to do, shifting property!
I come here to learn of changing developments in our industry like HIPs, EPC's, regulatory changes etc. and the last thing I need to hear are all the doom mongers that have nothing to do with our industry, doing their upmost to talk the market down. As Tony has already said, the HPC crew couldn't care less about the expansion of Foxtons or Winkworths, but on this topic, they can't shut up! Borrrrrrrrrrrrrrrrrrrrrrrring!
Out of interest, wouldn't it be nice if there was an estate agents forum, where you were required to prove your occupation before you could access it and then you wouldn't need to deal with the HPC idiots everyday.
I sometimes wish that there was a secure place to raise concerns about dodgy solicitors or brokers with other agents. If we had a place to get better organised, we could blacklist rouge traders and put them out of business. We could also buycott the likes of Rightmove when they decide to keep pushing prices up etc.
Sorry, got side tracked there for a second! Back on topic then, HPC GO HOME!!!!
Tim189 - Following the Japanese route then? Close to zero growth over two decades and house prices down year after year.
It's a bad model to follow, but alas, I think you're right.
Its flipping obvious that house prices are going to fall for years. However there won't be a big crash unless interest rates get put up and I can't see that.
Instead we are going to have continual small falls, year after year.
If you want a fast housing recovery, raise rates to 5% over the next year, have a big crash and start again. Huge destruction, people kicked out, banks needing bail outs again but you will have lower prices and return to normal transactions
Or we keep the status quo of low transaction, extremely low dribble down price falls for years and everyone here argues that prices will rise, fall, stagnate for years.
My bet is small falls and a engineered fall in prices trying to not rock the boat to much. However I maybe wrong and prices may crash big time.
@Will
Staying quiet would have been finishing after you first sentence!
I would expect you lot were expecting a comment from me. Well, I'm staying quiet for fear that Jonnie may want to bummer me.
The figures (actual solid sold figures, not some nancy index with embedded London funny money skew) speak for themselves.
"Stats are taken from the latest Land Reg report."
Hmm, most confusing.
Tony: Look - I am sure that 'Woolfie' is quite flattered by your tenacious standing up for him and trying to bury his error by blaming someone else for reading it wrongly (but the words written dictate otherwise...); probably quite likes your bravado and all that - but I reckon you're not really his type so if I were you I'd go sniff around somewhere else.
He's not even acknowledging your efforts - so you can't expect roses, can you?
@PeeBee
When all else fails pick up on the spelling eh? Nice one.
In your defence, I guess the sentence: "Stats are taken from the latest Land Reg report." Could be pretty confusing. To a complete dullard.
All of these stats have gone, passed! The falls or rises that have happened have happened! and forgotten in the whole - next month is a whole new story and no doubt a thread for either the Agents to smile about or the HPC'ers to get all excited about.
AND or BUT
The good news for the agents....all these wonderful drops or rises, simply mean there are sales happening for them to be being reported upon. So up or down if they have sales to report about then we are selling houses so like Richard said we are eternally greatful for rises and falls...as either or run your business well and you will still be smiling at year end.
Perhaps RANT most agents are too busy to be posting on every story and get more satisfaction at being able to laugh at your reactions!
I am not as busy today readying myself for a night out with the staff curtosey al-la-company for a brilliant 1 year of trading in our newest office! Prices dropped a little during that year but it doesnt matter as it is all relative. Units were still selling and a profit being made.
Out of interest RANT what do you do for a living?
Tony: you just knock yourself out, mate. You take the hair and you split it however thin you like. The words used by 'woolfie' are there to see. I commented on what I READ.
By the way, I think you meant to say "liAr" - but don't worry, I am sure you don't look a COMPLETE wenker by making that mistake.
On second thoughts... ;o)
@PeeBee
One last time. Wolfie made reference to the LATEST Land Reg report (issued this week). S/he even gave you the source. You claimed s/he was "well wrong" and "trying to be clever" (for reading a report correctly?) and pulled some stats off the net to try and back that up. You couldn't find any so quoted for a different period to that covered by the report. Then spent all morning squirming and picking fault with rounding errors and the like.
If I was being charitable I'd say you were a blowhard, uncharitable I'd say lier.
@Richard
Maybe because a story about Winkworth or Foxtons is as dry as a bone and nobody cares, not even EA's?
Richard - remind me how many EAs have posted on those stories you mention. Quick check... ah yes, none.
This story attracted more posts than any other new item today before the HPCers turned up (I'm not sure there are that many here, although F-FS seems to have taken on board much of our points of view).
This story is where the discussion is at, becuase it seems to back up what a lot of people are seeing on the ground.
@PeeBee
No, I agree with 8-12 weeks, I mean double-quick in comparison to the oft heard vendor refrain, "we've been on the market for 6 months and only had 3 viewings but we know we're priced realistically, there's just no buyers, banks not giving out money blah blah blah". Meanwhile transaction levels continue to plummet.
Woolfie: "Stuff priced realistically is still shifting in double-quick time."
Then it's not priced 'realistically', is it? 'Realistic' pricing should result in a sale within a period of 8-12 weeks. NOT "double-quick".
You mean "give-away", don't you?
I appreciate you have obvious problems with correct phraseology, so I am happy to assist once more in this instance...
Anyone else notice how the loony HPC crew do not post on other stories like, " Winkworth boom time, Foxtons expand" , that’s not what they want see is it??
Sorry loonies, Estate Agency is alive and well, what ever happens to prices!
Why are so many folk trying to explain they are clever and why do they care so much that prices could fall?
Obviously never had the ability to buy and either live of the state or pay rent to someone who made something happen for themselves.
My property will be clear of mortgage in 2 years, paid for by rent, to leave me a property worth circa 180K, if it drops so be it, but it will be mine to sell and release the cash to spend or just let some mug keep on paying me a nice rent and return.
Guys if you don’t want to buy, don’t, but please stop posting silly nonsense to try to be smart. Apart from petrol most things are falling, have you not noticed the economy??
Tony: No, sunshine - what is evident is that I quoted the correct figures based upon the actual words of 'Woolfie' ("They fell another 10% last year alone.") IF he had been clear and said "...in the last twelve months", then there would have been no need for this - would there?
I did not "hide" anything. I simply gave correct figures from a stated time period. The fact that the person did not state THEIR chosen time period correctly is not my fault.
TWICE now, you have accused me of 'making up stats'. I would appreciate your confirmation that this was not the case.
Or are you not man enough to admit you are wrong?
@HD
I'm in Portsmouth and would sum up the situation as vendors/EA's moaning that there are no buyers/mortgages whilst sticking with stupid near bubble level asking prices. Buyers waiting because they know prices will be lower next year. Stuff priced realistically is still shifting in double-quick time. More BTL's starting to sell up recently and this might get the market moving.
@PeeBee
Thank you. What is clear is that you edited out December 2010 onwards because it doesn't suit your agenda.
Tony: Yes - 5.56% is significant. Let's see what next month brings, shall we?
With regard to the validity of the figures I quoted, I have previously said READ THE POSTS!
As you and others seem either unable or too lazy to compy with such an arduous task, then I shall enlighten you once again. This time, I shall be even more generous with what I initially offered.
Land Reg Figures North-East Region 2010
January - 109,637
February - 110,002
March - 111,622
April - 112,460
May - 109,894
June - 109,224
July - 110,913
August - 110,526
September - 109,621
October - 108,655
November - 108,145
December - 107,364
So - as you can see, there was a drop of £2273 (1.84%) from January - December 2010, or, if you prefer (and ALL HPCers will...) a drop of £5096 (4.53%) from the highest point in the year (April).
PLEASE tell me that this is now clear...
It is clear that prices are tanking in some areas of the country.
@rantnrave
Did I say increase prices? No!
Of course prices have decreased and some vendors need robust advice but just do not preach doom & gloom every day - it becomes self fulfilling. Get on with the job.
@Clive Elroy
Same applies
Wolfie: What part of the country are you in? What is your current market doing?
@HD
I'd rather just wait for the wave to reach my neck of the woods thanks.
I think this is rapidly becoming another thread where location influences persepctive.
Going by the Land Reg data, there are parts of the UK where price declines have hit a speed which could be called 'crash'. In the SE and London, they may have merely 'trended slightly down' instead. The Midlands (my neck of the woods) is probably somewhere between.
Can a crash in prices be prevented from spreading? On a more fundamental level, should it???
Wolfie: Gwent looks like the place to bag a bargain, why don't you move there.
@PeeBee
A 5.56% fall in the first 3 months of the year is significant, no?
But you're right, that was never the question, the question was did you make up the 1.84% fall you quoted earlier?
Naughty naughty.
@PeeBee
I think it speaks volumes that you're getting completely bogged down trying to score points on my wording (and coming out of it rather badly). The general thrust of my argument is clear to everybody. Your initial claim that I am "well wrong" has been shown up to be a pathetic attempt at fudging some figures.
The stats speak for themselves:
Blaenau Gwent. -19.9% annual fall.
Conwy. -8.6%
Durham. -5.2%
NE Lincolnshire. -10.9%
Northumberland. -7.9%
Swindon. -4%
All pretty crash like I would say. Especially if you factor in another -5%pa due to inflation.
I suggest that you contact the Land Registry with your other point. You are clearly a better statistician than those that they employ. Maybe they used your trick of lopping off a few months here or there to suit their agenda?
Clive Elroy: "We need turnover and we need it now. That will only increase with realistic pricing."
No - you need profitable instructions. The only reason you need volume is your fee structure is obviously too low to survive in a drought. Reduced turnover should be met with increased charges. Why expect the vendors to pay by knocking THOUSANDS off their prices when you would do better if they paid you a few HUNDRED pounds more for a job done?
You might feel more inclined to 'sell' then, as well...
Tony: READ THE POSTS!
Just to show that I am not blind to stated fact, LR figures show that, from January to March 2011, there has been a fall of 5.56% in average property transaction values in the North-East region.
There - happy now? That, however, was NEVER the issue.
Woolfie: "I make no appologies for taking the most up to date figures." I'm quite sure you don't. The ones I put forward based upon your stated period are nowhere near good enough are they?
"How utterly laughable from the guy with the made up stats. Everybody can see that my figures are right and I'm giving my sources." Hmmm - MY stats and dates come from the SAME SOURCE as yours! I'm not saying your FIGURES are wrong - Land Reg say they are right - but your wording WAS wrong, as I pointed out. I quoted figures based upon what you said ie "last year" (2010).
"In answer to your question, the north east isn't a county is it? The figure for the NE region is in the table with the other regions. I guess if you averaged out all the transactions for all the counties in the NE, you'd get that figure of 9.3%." WHAT?? Okay - so you need me to PUT THE SPOONS IN YOUR HAND.
Darlington
Durham
Hartlepool
Middlesbrough
Northumberland
Stockton-on-Tees
Tyne and Wear
Hell - you can even throw in Redcar and Cleveland if you want but those 'Yorkshire' folk might complain!
Not ONE of them shows a drop of more than 7.2% - most of them under -5% - so how can they then "average out" at -9.3%? I'd LOVE to see THOSE stats...
"Now, just for fun, please could you explain where your figure of -1.84% comes from? Did you take it from an old report to try and prove your point? Come on be honest."
I have already given the info - I'm not going to repeat myself simply because you chose to ignore it in my earlier posts. Once you find it, use a calculator. That's what statisticians do.
@Ray - I must hang my head in shame, I mentioned those horrid 3 letters in my post! and your right too much air time.
@Rant I cant see any reference to "increasing prices in Rays post" are you after a reaction? Adjustments can mean downwards can they not? (or have I missed something?) forgive me if I have!
@Taff
Page 6, Blaenau Gwent. -19.9% annual fall.
Page 8, Monmouthshire +5% annual rise.
Any clearer?
Wolfie, am I being thick? I can't even see an option for Gwent. I can see one for "Blaenau Gwent" but that shows a 10.5% drop in the last year ... with approx 34 transactions. I then checked under "Monmouthshire" but average prices there are up over the last year. What am I missing?
Ray Evans seems to be economically illiterate. We need turnover and we need it now. That will only increase with realistic pricing. The corporates - you know who you are - are strangelling the market with their over pricing tactics.
Ray - let me get this right - you're saying EAs need increasing prices at the moment to realise more sales???
@PeeBee
So you decided to edit out the last few months because they don't suit your argument?
Wolfies -9.3% annual fall is clearly there. Are you saying this figure is incorrect?
@PeeBee
I make no appologies for taking the most up to date figures. The ones from the latest Land Reg report. The ones that most accurately reflect what is currently happening to houseprices in England and Wales.
Is that all you've got? Criticising a rounding error?
"I ain't pushing an agenda - just expect a level playing field. If you are going to quote times and figures - get them right or face the consequences."
How utterly laughable from the guy with the made up stats. Everybody can see that my figures are right and I'm giving my sources.
In answer to your question, the north east isn't a county is it? The figure for the NE region is in the table with the other regions. I guess if you averaged out all the transactions for all the counties in the NE, you'd get that figure of 9.3%.
Now, just for fun, please could you explain where your figure of -1.84% comes from? Did you take it from an old report to try and prove your point? Come on be honest. If you're gonna do that, why not go the whole hog and pluck some stats from 2006/07?
For goodness sake!
If ever some in this industry/profession were embarking on commercial suicide it is those continually advertising HPC
Some stats and opinions may or may not be true or the forecasts drawn from them, but why help to perpetuate HPC - and help destroy your own firms and livelihoods?
As some say here just make adjustments and get on with the job to the best of ones ability
rant: "in one post you're berating someone for reporting sings of an economic crash. In your next post, you are confirming that such a crash was widely predicted!"
Nah, pal - in one post I am ststing that someone has got their figures wrong - in the other I am stating that a DOWNTURN was obviously going to happen.
I don't see the word 'crash' there anywhere, mate... ;o)
How gentle can a 'crash' be, by the way? It seems more like a controlled landing to me...
Time will undoubtedly tell. LOTS OF TIME, at the rate this 'crash' is unfolding before us!
Tony: Sorry to disappoint - the figures I quote are straight from LandReg.gov , I am afraid. Check them out yourself:
http://www1.landregistry.gov.uk/house-prices/house-price-index-custom-reports
Select 'North East' from the search box, then the date range (they have from Jan 1995 to March 2011)
Go on - knock yourself out. ;o)
Wolfie: Thank you for the spoon. Now allow me to shove it where it belongs.
You said: "They fell another 10% last year alone." 'Last year' was 2010. The Report refers to 12 months from March 2010 to 2011. It also states 9.3% - NOT TEN.
I ain't pushing an agenda - just expect a level playing field. If you are going to quote times and figures - get them right or face the consequences.
NOW EXPLAIN THIS. Look at the graph on page 6 of said report. Where is the 9.3% fall on there, as per page 5? Look at the figures quoted for individual places within the region for further spoons...
Hahahahahahaha, PeeBee's been caught blatantly making up stats. I guess desperate times call for desperate measures eh?
@PeeBee
If I was goiing for effect, I'd draw your attention to Gwent with a price fall of 19.9% last year. Ouch.
Like I said, in some areas a price crash is happening right now. Open your eyes my friend.
@Jonb Youre right me thinks!
20% or even 10% off some of the properties on my books would sell to the cash buyers overnight and possibly even our company investment arm!
They would buy, rent, maybe renovate and then re sell for more money in the future.....I wonder how many of these economists and HPC advocates crying out for the crash are looking to build on their property portfolios.
As I have said before, I have 3 offices, 1 selling for prices in excess of 2007 in certain developments, 1 selling at the same level of 2007 consistently and one suffering a little still 10% behind the peak. All in the North, South Stockport Area (also hit by Large Companies going under and Government cuts - Yet the properties keep selling)
Many buyers saying the only reason we are not buying is because of the reports we are reading rather than the actual current prices or lending criteria.
Media driven downward turn may happen, thats where half of the 20% drop last time came from! 10% - 15% was real and the rest pure fear created by the media!
Imagine the horror for the HPC followers if Sir Trevor McDonald was to air a documentory on "Prices to Rise Sharply over the Next 5 Years"
Will they or wont they......I look forward to 6th May 2016 then and only then will anyone actually ever know!
And if my humble home has dropped 20% in 5 years I shall move up market and save the same % on the next one and move for less!
ITS ALL RELATIVE! Lets get over it..........and get on with it!
Well I'm no expert in economics but these seem to be two independent expert bodies, with no industry axe to grind/nothing to sell to people (unlike many of the stats/predictions from Nationwide downwards) coming to similar conclusions.
Capital Economics have been yelling 'fire' now for a very long time but that doesn't mean there isn't one! That others are coming to the same conclusion as them seems fair enough and (as below) tallies with my experience 'on the ground'. so to speak.
As for the 'bubble' graph, I've seen it before and find it interesting. I haven't seen what it's based on though ... you have to assume it's quite stylised and reflects no 'actual' bubble but instead a set of characteristics common to many but not necessarily all bubbles in history.
The shape - which I guess can be distributed differently over time - is more useful than the text labels though! I take the mathematics over the spin any day.
@PeeBee
None of the above. Just a guy with a pair of eyes, an open mind and, unlike you, not pushing some agenda that doesn't stand up to scrutiny.
Looks like I'm gonna have to spoon feed you. Here's the link to the Land Reg report, you'll be wanting to look at page 5:
http://www1.landregistry.gov.uk/upload/documents/HPI_Report_Mar_11_db10pv4.pdf
@Pee Bee - in one post you're berating someone for reporting sings of an economic crash. In your next post, you are confirming that such a crash was widely predicted!
Why is it anyone takes any notice of Capital Economics and their wildly inaccurate predictions? They have been forecasting a 20% drop in house prices every year since 2001. How often do these "experts" get their predictions right? Never, so why do we listen to them?
The media, in particular the Daily Mail, (part-owners of Primelocation etc.,) are always first to repeat the CE inaccuracies because they make sensational headlines. Unfortunately they damage sentiment and will be a self-fulfilling prophesy if we Agents don't do more to reflect our side of the market.
Let's face it regardless of who is in government or what the so-called "experts" have to say, people still die, retire, divorce, marry, have kids, move jobs etc., so they will always need somewhere to live and it's our job to satisfy that need. There will never be a perfect balance between supply and demand, with either too many properties and not enough buyers or too many buyers and not enough properties.
So why make a big deal of it and worry yourself silly, just get on with the job in hand!
Tony: EVERYBODY 'predicted' the downturn - usually way too early (and were therefore ignored or ridiculed); and too little. Man in the street knew life could not go on the way it was; so why did those who could control it not act?
F-FS - respect to you for acknolwedging that despite your years of experience, you were wise enough to see all was not as it should be.
Re the bubble - I posted this graph on another thread, but I think it got buried in the midst of an unrelated slanging match. It's actually an old analysis from years gone by, but incredibly insightful in my opinion, especially the phrases assigned to the different stages.
(copy & paste this link into a new browser bar)
http://www.housepricecrash.co.uk/graphs-bubble-lifecycle.php
Looking at it, I think we're past the 'return to the normal stage' of the Bull Trap and moving closer to the 'fear stage'. Any one else care to agree or disagree?
Wolfie: "They fell another 10% last year alone. Stats are taken from the latest Land Reg report."
Hmmm - the one I am looking at says different. January 2010 started at £109637, ROSE to £112460, and finished off in December at £107364. That would be a drop of 1.84% if you take the whole year; 4.53% if you want to use high and low just for effect.
EITHER WAY, you are well wrong.
You a north-eastern HPCer living on hope - or just a suvvern doom-mongerer trying to be clever?
This report squares 100% with my experience.
Roll back a bit, and even in those blissful days of the mid noughties, it was starting to become clear something was up ...
As we went through the decade salaries weren't rising much, if at all, but salary multiples were (big time), 'self-cert' was all the rage (and didn't we turn a self-interested blind eye to what our favoured brokers were up to?) while people fell over themselves to make offers on what seemed like a one-way bet .. all the advice was to take things to the max and property shows were compulsory viewing for all females between 20 and 70.
Meanwhile with pension returns down as the stock market flatlined, BTL was seen as the path to riches, more often than not on fag packet calculations based on anticipated capital appreciation, rather than solid business plans based on achievable yields and realistic assumptions about voids and maintenance costs.
The young crew thought this was business as usual but old codgers like myself had seen at least some of it before ... it had the overipe smell of funny money about it. When people got a grip in late 2007 it was like a roadrunner cartoon, there was no solid ground under anyone's feet.
We need to be frank with our sellers that we were in a BUBBLE and ALL BUBBLES BURST eventually. The Bank of England has thrown everything but the kitchen sink into this one but the measures have finally run out of puff. The only way is down, for an extended period.
I actually suspect the falls will be faster than predicted here. Yes there are people stuck in negative equity but the vast majority of potential sellers aren't, there is pent up demand, and also pent up supply among sellers waiting for 'better times' (ie a return to a brief and heady 'normal' that was never 'normal' in the first place).
But the whole thing is blocked due to unrealistic asking prices and lenders unwilling to lend while awaiting the inevitable falls.
We have a role here, not just to make money but to act en masse for the good of the country, and it's pretty obvious what it is: educate sellers to GET REAL in their expectations.
@Rebel
FACT: You don't know what you're talking about. Ever heard of Roubini? Jeez, even Vince Cable called the house price bubble.
I'm turning Japanese I think I'm turning Japanese, I really think so.
FACT: Not one prominent economist predicted the current economic downturn.
I can quite believe it but considering they're talking inflation adjusted falls, I'd say it'll be more like a decade.
Open your eyes people and be honest with your Clients. In many parts of the country a crash is happening. Take the north east for example, prices peaked at £130,000 in 2007. Now the average price is about £101,000. They fell another 10% last year alone. This effect is spreading across the UK. Rep Ireland, Northern Ireland, Scotland, Northern England, Wales, Midlands.......................
Stats are taken from the latest Land Reg report.
Assuming IRs stay the same and lending remains stifled, then I believe the largest impact on the market over the coming months is going to be sentiment.
There is a lot of pent-up supply out there - vendors who have held off waiting for prices greater than their 2007 peak. This is partly reflected in the number of accidental landlords etc.
With each set of data that comes out, a return to those price levels looks less and less likely though. As the YoY measures start showing greater negatives, there might be more of a rush to sell now rather than later, creating a downward spiral. Banks holding back from releasing repos to the market will also fear getting less of their money back and be more tempted to sell up now too.
Fear is as big a driver in a falling market as greed is in a rising one.
I will never understand how an organisation that is not actually operating within an industry can be so sure of their findings. I work in Nottingham and you can buy a nice 2 bedroom house in a good location for about £90k. Are they really saying that this is overvalued by 20% ! Its all a load of codswallop.
What a load of tosh. House prices fall when people are forced to sell, which has been the case in some parts of the country, but not in others. While banks want to lend money and people still want to borrow it and own their own home, prices are going to stay somewhere around their present level. My grandfather always told me to buy land as they are not making it anymore, well I believe that still stands true, it is just that we are not experiencing upwards movement at the moment.
These are the same economists who said interest rates were going up in early 2011 and could'nt predict the banking crisis.
What a load of nonsense. House price falls for 5 years!
House prices are likely to fall - slowly, gradually, like pulling a wisdom tooth out with a bit of cotton, for a generation.
In some areas of the country house prices went up by a factor of 5 - even 6 in some places - over a few short years. Over the whole country between 1997 and 2007 huge rises were recorded due to low interest rates and stupid lending practices.
Pressure on wages is down. Interest rates - in the medium term - can only go up. The banks are being forced to hold more capital and the de-leveraging will take a generation.
It will take 20 to 30 years to undo the madness of the decade between 1997 and 2007.
So, look for cheaper premises - get the overheads down - keep staff numbers low and batten down the hatches. The good times are not coming back for a long time.