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Flat to down in the north.
Flat to up in the south.
Up to up in London.
This, basically. Slow deflation across most of the country, London propped up by foreign money.
Near-zero interest rate means those who overstretched in the boom times won't get punished for it. Banks won't do new lending anywhere near that so first-time buyers are priced out. Anyone who owns and wants to move has the problem of chains where the bottom needs to sell to a FTB, but there are very few who can afford it - so everyone gets stuck.
Sales volumes are about a third of what they were in 2006/2007. Lots of people clinging on in price-falling areas expecting to sell at what it was "worth" at the peak.
"Sales volumes are about a third of what they were in 2006/2007. Lots of people clinging on in price-falling areas expecting to sell at what it was "worth" at the peak. "
or clinging on because theres actually no need to move now. where as before it was climb climb climb make money make money .
First time I ever sold a house last week - what a crazy experience, people willing to spend sooo much money after just a short visit. Market seems to be pretty "normal" round here selling when they need to & buying when they need to.
There is a lot of new housing stock being built, that theoretically should keep prices down - supply demand etc... But only to a limited extent, both in terms of volume and geography
Ultimately it's a market, so prices are what people are prepared to pay and banks lend and people sell at. In theory the market will find it's own level, if you really have to sell then you have to take what is offered, but the housing market isn't primarily driven by people having to sell, more by people upgrading lifestyle. In hard times people are cautious, even though prices are lower and interest rates really low by historical standards people hold what they have, stagnant market. So it goes.
Predictions, buy what you can afford comfortably. Don't bank on capital growth, anyway it doesn't make you richer unless you can sell out and downsize, so isn't a bad thing unkess you were unlucky and bought at peak.
And make sure you have enough left over for bikes and holidays.
or clinging on because theres actually no need to move now. where as before it was climb climb climb make money make money .
you don't make money unless you sell and move somewhere cheaper, or it was not your main residence. If you move somewhere then those houses have also gone up in price, so no gain.
The worst bit was that the larger houses increased in value more than the smaller ones.
My wifes flat has not really changed price since 2000, although it went up sharply before that, whereas the house has gone up a lot.
The differential to the detached places we would want to go to has increased, so it is harder to move now.
So I wouldn't mind prices dropping to 2000 levels, although that will leave a lot of people with huge negative equity.
demand of good houses is low.
demand of quick built small cardboard lego land houses is high.
when i was looking one of my criterias was more than a single drive space.
that took out almost ALL new builds in my budget around here .... still got me a 3 bed house with en suite - couldnt swing a cat in any rooms though.
ended up with an ex council 1950s brick built (and i mean every wall downstairs internally) story and a half - rooms are huge in comparison.
location, location, location. 😉
National house price trends are irrelevant now. Two halves of the same country going different directions.
Sorry, but you'll have to research your own local area.
But short term, my guess is that whatever you find, current trends will continue until the next election. After that, who knows. Certainly wouldn't trust any prediction from any body connected to the industry, so?
One other thing to factor in - mortgage affordability can only go one way from where it is now.
but put it into an account paying 6%
Good luck with that!
Like lots of people have said. Prices will depend on location.
Areas of high unemployment low investment will stagnate at best or more realistically fall in valueAreas of high employment/investment commutable to London will do rather better
The rest of us will just bump along
Here in the south east near London you can see the market picking up again (for good and bad). When I visit family in the north east or south wales it's a very different story - the house market seems to be on it's arse. These have the highest proportion of workers in government employment and the government is aiming the reduce it's workforce by +1M workers. Not good for these areas. The private section fill in of workers than is going on seems to be south east lead....
Dooosuk:
They won't be able to do that, so will have to sell for a loss.Or they just keep them and keep renting them out.
But the point about interest-only mortgages is that you still owe the original amount at the end of the period, you haven't paid back the capital. This means that you have to either pay it back there & then, or take out another mortgage which may not be feasible or desirable. So the property then becomes a distress sale.
In much of the south, at any rate, the rental income on a property is less than the rpeayments on a normal capital & interest mortgage.
South East traditionally has biggest volatility in the market, so today's growth can be tomorrow's crash esp when rates start to go back to normal levels - but, averaged out, it is true SE growth has been highest over a number of decades reflecting labour market.
anybody know of a way of finding houses for sale that have had somebody murdered or something in them thus effecting the price and meaning it's been on the market for ages? i'd happily live in a murder house
If you want some cheerful reading, check your postcode on here:
http://www.propertysnake.co.uk
prices won't go anywhere until there are more forced sellers
Yup, artificially low interest rates, and shit loads of empty reposessed properties on mortgage companies books, that they are rolling the loss forward on to keep the market propped up - the mortgage companies should be forced to pay council tax on them, that would get things moving!
Like in so many other ways, the South East has effectively decoupled itself from the rest of the countries economy. Comparing house prices in London and the rest of the country? You may as well compare them with Papua, New Guinea, or downtown Manhattan. Its about as relevant
Areas of this country have been in permanent decline for years. Labour tried to prop them up with spurious public sector jobs. But that gigs well and truly up now. The huge public sector cuts, which the tories have barely started with yet, will raise unemployment yet further. Massively in some areas! And the private sector is not filling the void. Nor will it.
All capital and investment is being steadily sucked south. Discounting the south east, I'd be amazed if property prices in anything other than the odd (2nd home) hotspot are headed anywhere but down, or at best stagnant, for decades. perhaps permanently.
Christ! I've even depressed myself, typing that 😥
Binners, I suppose that at that point we cross into the realms of housing benefit etc.
there can be little doubt that its fuelled and underwritten the BTL market, and allowed companies to pay wages that their staff can't afford to live on in the area - if that was taken away, then perhaps companies would feel some more pressure to relocate away from the south east and create jobs elsewhere (?)
Who was it who said houseprices will always go up?
12 years of negative equity to get from a 1989 peak to an increase in value, the trend is always up but it's not always rosey, and looking at the historic data of a boom-bust cycle (cos that's what happens with house prices) how long do you think it will take to get back to a 2007 peak?
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lets not forget the effect of the diminishing bank of mum and dad accounts... people are living longer and spending more to live in their later years, care costs more... less properties being handed down to the kids.
im lucky i suppose in that i've never expected any form of inheritance, definitely not property so always known i'd need to sort myself out and as such have been saving for years.
EDIT - a return to 1995 would be lovely for us first time buyers!
just did a quick mortgage calculator based on a deposit of 30k for a 180k property (average price for a small 2 bedroomed place near me and if we saved HARD for another 2 years me might get that much deposit together)
every single mortgage option ended up with a higher repayment than we're paying in rent at the moment. think it'll be renting for the next 2 years then and continue to save!
TBH, as a first time buyer it doesn't matter what "the market"* does, it's about what you pay for the individual house you want to buy and live in.
Find somewhere for sale you'd like to live, make a [u]very[/u] effin' cheeky offer, see what they say. Repeat until you're successful. You're in the position of strength, keep looking and eventually you'll find the seller who will need to sell. It's not emphasised enough, but it's the only time that you have no other economic pressures (selling a house) and can really take the p with the offers you make.
"The market" doesn't move downwards until first time buyers' cheeky (if you're not embarrassed it's not cheeky enough) offers get accepted, so you might as well lead rather than follow. Nothing to lose trying anyway.
And "Average prices" are precisely that -if you want the "small 2bed where you live now" - aim to be the extreme outlier on that graph not the fella who paid 180k. Your calcs may be different then.
*Wrong term IMO, but that's a different debate.
Loum-- i just offered £1 for a house--they looked at me funny....
The truth is that prices are still too high--they have been ballooning for eons, the strange 'home' ownership obsession continues.... personally i think it needs turning on its head.....public housing , you live, you die, someone else gets to live there.....enough stock and you have choice.
Phil, sounds as if you are taking a sensible approach. One of the problems is that housing is anything but a free market. Loads of distorting factors that are preventing the housing market from clearing properly. Then you have the whole distortions in the financial markets - we are in an economic slump due to excess leverage throughout the system, and yet rates are kept artificially low. The counter to leverage/borrowing is saving, and yet this (1) is a withdrawal from the economy and (2) doesn't really make sense with rates are falsely depressed. And we wonder why the outlook remains bleak?
There is a sensible distinction to be made at the moment between a house to live in and a house to invest in/make money out of. The former is much easier - if you are giving yourself the financial ability to act quickly at the right time, then there will be opportunities and the odd (relative) bargain if a seller is under pressure. Otherwise, you may find a lovely place to live but where the price doesn't rise that much. Then it comes down to the rent vs cost of financing the house analysis that you have already done.
Having to pay £180K for a little house is just madness, totally crazy.
What's the repayments on your envisaged £150K loan? £800-900?
I really hope the whole lot comes crashing down for you, I really do [and I'm saying that as someone who owns 2 properties outright] We gave our oldest daughter a good deposit and she got a decent deal with a repo place but the cost was still stupid.
nice - what about for all those who it comes crashing down!I really hope the whole lot comes crashing down for you, I really do
nice - what about for all those who it comes crashing down!
Do what I'd do and stay where you are, the house won't have changed, just its nominal value
£1 might be a step too far, even in Wales, but you lost nothing. If they don't "look at you funny", you're paying too much.
Agree with you philosophy rb, problem is CMD doesn't, and you have to live in the environment we have.
Also agree that prices are too high. Personally, I can't see any way they'll come down without buyers making low offers, and sellers reluctantly accepting them.
Edit: this debate's headed for this territory (and it makes this place look sane):
http://www.housepricecrash.co.uk/forum/
Do what I'd do and stay where you are, the house won't have changed, just its nominal value
But look where poor Philly's having to live at the moment, while he saves for his deposit...
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Those dogs of his make a mess
His hidden the three MTBs well!
They're under all the boxes
Isnt that an Orange 5 on the LHS of the main dwelling (next to the garden feature)?
its not the dog that makes the mess its the wife 😆
EDIT - thanks for saying i'm taking a sensible approach... i'd like to think i am but it is genuinely nice to hear it from somebody else 🙂
I saw a graph recently that showed how house ownership versus age had changed dramatically between 1990 and 2010 (unfortunately didn't save it so can't show it!).
A huge proportion of houses are now owned by the over 50s.
I think there will be a substantial fall in house price v. average earnings within 10-15 years.
Why should young working people pay old retired/dead people a fortune for their houses?
And I'm a 50 YO homeowner 🙂