Falling UK house prices?

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Falling UK house prices?
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Treacodactyl
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Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Nov 13, 07 2:44 pm Post subject: Falling UK house prices?

For the first time in ages there seems to be more reports suggesting UK house prices are falling or rises are at least slowing. The latest is here: https://news.bbc.co.uk/1/hi/business/7091469.stm

Now with the interest rates higher than they've been for a while and inflation creeping back up they're probably not going to fall much soon are we in for big falls, stagnation or rises in the new year? Does anyone have any insight into what might happen?

Northern_Lad

Joined: 13 Dec 2004
Posts: 14210
Location: Somewhere

Posted: Tue Nov 13, 07 2:46 pm Post subject:
Hang on, I need a raven, a sparrow and two newts - I shall then read their internal organs and be as accurate as most forecasts.

boisdevie1

Joined: 11 Aug 2006
Posts: 3897
Location: Lancaster

Posted: Tue Nov 13, 07 2:50 pm Post subject:

Inflation going up means that people will have less money available for mortgages and other forms of debt which suggests that house prices will fall.
Also in the past the government has used interest rates as a way of trying to keep inflation to set targets. Which kind of implies that a rise in rates might be in the pipeline. BUT, a lof of the inflation is due to a lack of supply, not too much demand so it might not happen like that.

Gosh, I knew that A level in economics would come in handy one day.

Green Man

Joined: 23 Jul 2006
Posts: 5272
Location: Rural Scotland.

Posted: Tue Nov 13, 07 5:00 pm Post subject:

boisdevie1 wrote:

a lof of the inflation is due to a lack of supply, not too much demand so it might not happen like that.

As long as the BofE sees it that way.

Gervase

Joined: 17 Nov 2004
Posts: 8655

Posted: Tue Nov 13, 07 5:04 pm Post subject:

I wish. If prices were to fall - or even stabilise for a few years - it might stop people using property as just another tradeable commodity and see them putting time effort and money into improving the existing housing stock rather than trading up from one tacky box to a slightly bigger tacky box with more room for cars.
One of the joys of leaving the South East was realising that I would never again have to listen to Mondeo Man and his gormless mates proving that willy-waving about house prices and mortgages does not make for scintillating conversation.

Treacodactyl
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Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Nov 13, 07 5:18 pm Post subject:

boisdevie1 wrote:

I don't think house price inflation it taken into account when measuring the headline inflation rate, the CPI. I think many people expect interest rates to go down rather than up due to the credit crunch as well.

Treacodactyl
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Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Nov 13, 07 5:21 pm Post subject:

Gervase wrote:

It would certainly be easier to plan ahead if house prices were more stable. Although I don't have a Mondeo and I think I'm rather choosy to who I wave my willy at I don't think you can get away from wondering about house prices especially if you're planning on moving to somewhere larger.

Fee

Joined: 21 Mar 2005
Posts: 15922
Location: Earth

Posted: Tue Nov 13, 07 5:24 pm Post subject:
We've just bought a Mondeo

Fee

Joined: 21 Mar 2005
Posts: 15922
Location: Earth

Posted: Tue Nov 13, 07 5:25 pm Post subject:
Oh, and I haven't got a willy, but if I did, I might wave it snigger

oldish chris

Joined: 14 Jun 2006
Posts: 4148
Location: Comfortably Wet Southport

Posted: Tue Nov 13, 07 6:01 pm Post subject:

Fee wrote:

We've just bought a Mondeo

I've had one for 8 years now!

But I don't have a mortgage.

Politeness forbids any reference to waving.

Apparently, there are so many "Buy-to-Lets" that rental income is becoming depressed, therefore the only reason to hang onto a BTL property is the capital gain (learnt that off BBC somewhere). The danger of loosing the gain made so far, could prompt lots of BTLers selling up, "depressing" the market further.

Contrarywise, lots of new peoples (with E. European accents), lots of work (building Olympic Villages et cetera) no sign of a recession means that any fall won't be too far.

My bet is on small fall followed by stagnation.

So Treacodactyl - you thinking of moving?

Treacodactyl
Downsizer Moderator

Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism

Posted: Tue Nov 13, 07 6:09 pm Post subject:

oldish chris wrote:

So Treacodactyl - you thinking of moving?

I've been planning to move for a few years, from Surrey to Devon or Cornwall. The aim to to buy a smallholding or farm but it will probably be best to buy a small property to move down to, then sell our current house while looking around for the smallholding. So house prices are rather important to me at the moment.

I've also read about the possible bursting of the buy-to-let bubble and that, coupled with the change to capital gains tax next April might be good news for us as that'll be the type of property we might be looking for.

chez

Joined: 13 Aug 2006
Posts: 35935
Location: The Hive of the Uberbee, Quantock Hills, Somerset

Posted: Tue Nov 13, 07 6:55 pm Post subject:
Apocryphally; one of the reasons that our move fell through was that this house was valued at �10K less than we paid for it last July, which is approximately 4%. Also, we have a small buy to let that we are looking to shift and it's been on the market since Easter with very little interest.

lottie

Joined: 11 Aug 2005
Posts: 5059
Location: ceredigion

Posted: Tue Nov 13, 07 7:32 pm Post subject:

We sold our house to someone who pretended they wanted it for themselves but really saw it as an investment opportunity---I'm happy-- we just wanted shut---looking at the pictures on the web he's spent a fortune internally--now 3 state of the art bathrooms instead of 2 tatty ones kitchen to die for,even new stairs etc etc---but it was already the dearest house on the road even in it's untarted up state so he's not so much sharp as daft ---he'll be doing it on borrowing---already reduced his exorbitant asking price twice---with the latest news he must be sick as a parrot. There must be other developers in the same boat if prices are dipping.

Contadino

Joined: 28 Sep 2007
Posts: 190
Location: Puglia, Italia

Posted: Wed Nov 14, 07 6:01 am Post subject:
There is such high demand for housing in the UK that I doubt that there will be a significant 'crash' (although, just a drop of 3% on a UK house price is a big wad nowadays.) Prices may drop a little (percentage-wise), stagnate, and then rise again.

Green Man

Joined: 23 Jul 2006
Posts: 5272
Location: Rural Scotland.

Posted: Wed Nov 14, 07 10:05 am Post subject:

Just supposing property prices halved to what some regard as their true value, who would it affect? Obviously those who stand to inherit a house, but it could save �� in inheritance tax. For those who have already bought and you have budgeted correctly you should still be able to pay your mortgage, although I agree it would be sickening. If you are planning on upsizing, your new property will be much cheaper, so I don't think many will be too badly affected. Just on paper we may all be less rich than we thought. So what? At least nurses and key workers may have a chance to own a home near their work.

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