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Written by rosalind renshaw

Britain faces an 'extended housing market slump, the International Monetary Fund has said.

The IMF has warned that UK house prices are too high and should drop by 10-15%. The IMF delivered its warning after slashing its forecasts for growth in Britain by a bigger margin than for any other major economy.

It called on Chancellor George Osborne to produce a Plan B for the economy, saying that economic recovery may still not materialise as a result of austerity measures.

However, Britons seem cheerily unaware of international unease over the UK housing market.

More expect house prices to rise than fall over the next 12 months, says today's confidence tracker from Halifax.

Just over one-third (34%) forecast that the UK average house price will rise over the next year, compared with 19% who believe house prices will fall.

People living in London and Wales are the most optimistic, and those in the East Midlands and North-East are the most pessimistic.

The survey also shows that 61% of people believe that private rents will go up.

A similar exercise by property portal Zoopla,  shows even more confidence about house price rises.

A total of 63% overall expect house prices to rise over the next six months, but the figures are skewed by upbeat Londoners, 80% of whom anticipate price rises.

This time last year, 57% of home owners overall expected a rise in property prices, says Zoopla, while at the start of this year only 55% thought prices would go up.

In the latest survey, just 18% of home owners expect house prices to fall over the next six months.

The average home owner expects a 3.2% rise in their local area, with Londoners expecting a 5.4% rise.

The confidence in the housing market was not mirrored by improved sentiment around mortgage availability. Over a third of those surveyed (35%) believed it is harder to secure a mortgage than three months ago and only 10% thought that finding a mortgage had become easier.

Owners in the North-East of England are the most pessimistic about the state of the local property market, with 31% expecting the value of their home to drop over the coming months.

There were 2,794 respondents to Zoopla’s survey, of whom 2,755 were home owners.

But there is a big age divide. See next story

Comments

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    Why the market will not drop yet.....

    http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/HomeBuyingSchemes/DG_4001398

    Just think how much the Gov' would loose if prices drop. I think they will drop after there have been enough sales to pay for the next MPs dinner dance party or whatever, but until then.

    • 24 July 2012 09:25 AM
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    I know a sales negotiator who likes to be called an estate agent.

    • 20 July 2012 22:19 PM
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    from japan

    • 20 July 2012 17:07 PM
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    Dave;

    "this time round me thinks most have more than one btl "

    You believe that 'most' EAs in this country have 'more than one BTL' ...?

    Where on earth do you get this idea from?

    • 20 July 2012 16:26 PM
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    Poor Mrs Jonnie unless you have not gone home

    • 20 July 2012 16:14 PM
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    Meh, the IMF have been warning the UK since 2005 or so. Who gives a fudge what they have to say?

    The time to worry is when we need to go to the IMF for a bailout.

    • 20 July 2012 13:50 PM
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    Dave

    I know an EA with no overdraft, a million quid gaff with a £150k mortgage and 3 commercial units that he also has next to naff all finance on but like your bird up to her lug holes in debt we can’t consider all EA’s to be in the same position can we mate?

    There are people selling that have zero equity im sure and im also sure they wont have enough to pay for a pot to piss in after completion but like I said to Rantnrave this week the world isn’t made up completely of the type of sellers you seem to want it to be, as much as it pains you there is a big (majority) chunk of society doing very well, not seeing their income erode, not worrying about fuel prices, not stuggling to pay the bills and looking forward to a weekend in the sunshine………………………….talking of which its almost one o’clock, im gonna do one for the day, promised Mrs Jonnie I will have a half day

    Jonnie

    • 20 July 2012 12:58 PM
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    thats not the problem

    I know an estate agent with 250k overdraft and 700,000 in mortgages including her own property and btls

    she recently did a re-evalution and had the property valued at

    900,000

    however,this means that effectively she has minus 50,000 net worth

    thats with low interest rates and propped up prices...in my book she is highly vulnerable to financial ruin

    all thats keeping her going is cash flow...any shock to her business(sales bad last 3 months) and she is toast

    as prices fall,those selling who are in nequity will not be able to pay their agent fees

    • 20 July 2012 12:45 PM
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    Dave,

    Stop with this BTL thing – if you believe that EA’s across the land are running their businesses in a way that they hope will retain equity in a BTL they might or might not own you don’t understand what motivates us

    The other thing is all EA’s I know that own BTL’s bought very well and / or got loveley little bargains as they own them in patches they know well and did it ages ago before it was fashionable for people that knew nothing about property to bore their friends into a coma talking about the ‘investment’ they had, either that or they binned them in 07 / 08 when we all had our balls squeezed and knew bad times were coming

    You have a proper stick up your jacksie about BTL landlords and I agree that people that bundled in with those rip off property clubs and got suckered into new flats in crap towns for rocket money on high LTV’s will or already have had a problem. However you will struggle to find a BTL’er that’s also an EA in that category

    @POTW……………………erm, no, no its not, it’s a cracking job if you are good at it.

    Jonnie

    • 20 July 2012 12:35 PM
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    of course the irony is that sales volumes will rise dramatically if prices fall and btl portfolios liquidate

    in the 90s it was the agents who through necessity,slashed prices or disinstructed

    this time round me thinks most have more than one btl and cannot face the agony of trashing prices(vested interest)

    • 20 July 2012 10:15 AM
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    It must be a bugger being an agent at the moment. Wanting, hoping, praying, willing the housing market to rise, for things to get back to normal, for unlimited credit to be made available to maintain the market ... but knowing, deep down inside, that the market will be stagnant/falling for a generation to fix the simple fact that the next generation cannot, in general terms, afford current prices.

    • 20 July 2012 10:07 AM
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    according to seb coe the whole british economy will be transformed by the olympics

    yeah right

    the guy is delusional and set to pick up a 2-3 mill bonuse for getting the games ready in time

    he's everything thats wrong with this country

    • 20 July 2012 08:35 AM
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    This just goes to show how blinkered and stupid people can be sometimes

    So in a recession with zero wage inflation and mortgage rationing, and more down-sizers than those moving up - house prices are likely to rise????????

    Come on people wake up

    ps - Britain will also come top of the medal table at the Olympics

    • 20 July 2012 08:11 AM
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    just like japan

    • 20 July 2012 08:00 AM
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