Good 2008 UK Property Article
Discussion
According to a new report by the highly respected credit reference agency, Experian, house prices will fall throughout most of the UK over the next 18 months.
But the prediction is that the level of damage on profitability will largely depend on where property investments are held.
It suggests the fall in property values will be disproportionate and irregular - and conversely, some areas of the UK are likely to see property prices continuing to rise.
Whenever the housing market is suffering a period of uncertainty, the press have a field day, making contrary predictions that are aimed at selling newspapers to an ever more nervous general public.
During the last few weeks we have seen a myriad of headlines announcing doom and gloom, then a few suggesting light at the end of the tunnel, then more doom and gloom - and finally, this week, the press have gone all out saying the meagre drop in interest rates won't help prevent a long-term property price crash.
Confused readers must wonder which headline is right - if any - and it seems much depends on the day of the week, which newspaper you buy, the town or city you buy it in and whether the sun is shining outside your window on that particular day.
After many years in this business, I am very aware that dramatic headlines spelling out turmoil and disaster tend to attract more attention (and sell more newspapers) than moderate and well-balanced reports of how it really is.
When an editor says 'use some journalistic license', they simply mean 'make it explosive', regardless of the facts.
More cautious view
As investors and homeowners, it is probably wise for us to take a cautious view of what the periodicals say and look rather more intensely to the experienced, analytical and rational opinion of 'people in the know', as it were.
More importantly, those with no axe to grind and no headline-driven profit to gain are more likely to offer a balanced view.
While it is sometimes very difficult to find a truly independent assessment of the state of the property market and where it might be heading, there are those whose opinions I personally value far greater than others.
Experian are one such company. They have nothing to gain from making dramatic or exaggerated warnings about chaos and catastrophe.
And in their favour, their day-to-day dealings in the property arena from both sides of the investment fence means they can assess more accurately the likely repercussions of the so-called credit crunch crisis.
Last month, Experian released an important and influential report following their study of market trends and ground-level property transaction activity. The report's conclusions surprised many commentators, but to date no one has actually disputed them.
50% of areas will see falls
According to the study, half the country will see house prices fall over an 18 month period, largely driven by the knock-on effects of the worldwide squeeze on credit.
Buyers are being discouraged and in some cases prohibited from purchasing property, because mortgage lenders have become much more restrictive about who they will lend to and how much they will lend.
This has removed a substantial volume of buyers from the market - and others are being discouraged from borrowing due to interest levels, adopting a 'wait and see' policy.
The eternal influence of supply and demand is now inflicting a downward pressure on property values, as competition bites in with more sellers scrambling for fewer potential buyers.
Experian predicts the biggest price fall of 4 per cent (considerably less than many newspapers are suggesting) will occur in the West Midlands by mid 2009.
A 3.7 per cent drop is predicted for the East Midlands, 2.8 per cent in the South West and 2 per cent in Northern Ireland.
It is anticipated that Northern Ireland will fair quite well, despite the price drop, because it has already experienced a remarkable boom period over the last two years with prices far exceeding average growth.
Andrew Burrell, on behalf of Experian, said: 'Five UK interest rate hikes since mid-2006 were already hitting consumer demand and global developments tightened the squeeze. The UK economy and housing market will become direct casualties of the current worldwide credit crunch.'
Slowing economic growth
He warned that economic growth would slow from just over 3 per cent this year to just over 2 per cent in 2008 and added: 'The downturn in consumer demand is more abrupt, with demand growing by less than 2 per cent year-on-year.
'Only significant reductions in interest rates bring an upturn from 2009. We expect the UK housing market to suffer over the next two years. House prices are forecast to record the lowest annual increase since the mid-1990s, while repossessions are also set to reach 15 year highs.'
The company suggest that London, with its city bonus culture and property shortage, will prop up the market with a 6 per cent increase anticipated in the capital.
Scotland is also expected to ride the storm with an encouraging 7.7 per cent rise in values predicted.
Experian envisage a more moderate 3 per cent increase for Wales and smaller property prices rises for the North East, Yorkshire and the North West.
However, even these encouraging predictions could be dislodged if mortgage providers and credit companies come under tighter pressure to curb lending.
Any instability created in the general consumer market is likely to spill over into the housing market.
This could enhance the expected impact, thus causing more damaging results. Under such circumstances, prices could fall in all regions of the UK, according to Experian.
Two year stagnation?
While many authorities are predicting a two-year long stagnation of the housing market, the International Monetary Fund suggests the effect of the worldwide credit crunch will actually cause a slump.
Other commentators, such as the online property consultants, Hometrack, say they have witnessed the number of prospective buyers registering with estate agents falling at a record pace ... and data released by the Bank of England shows mortgage approvals are at their lowest for two years.
Interestingly, the Citizens Advice Bureaux has confirmed that the rise in the cost of household bills and interest rates are now hitting families hard. The organisation said it has dealt with a record 1.7 million debt problems over the last year, which represents an alarming 20 per cent annual rise.
These statistics display the detrimental effect of rising living expenses on the most vulnerable people in our society ... and continued financial restrictions and tighter lending policies will do nothing to persuade first time buyers onto an uncertain and unstable housing ladder.
First time buyers are the foundation of the entire housing market and without them being in evidence in substantial numbers, it is certain to suffer. This is therefore a time when investors need reliable data to make important strategic decisions over which assets to keep and which to dispose of.
By my reckoning, Experian's report offers some useful if not vital pointers.
Smaller southern towns to fare best.
In the final analysis, the report says there are signs of bias towards the smaller southern towns in its forecast rankings.
As in the past, Brighton, Milton Keynes, Ipswich and Peterborough show some of the UK's most vigorous growth.
There also remains some strong northern city presence, with Leeds, Cardiff, Edinburgh and Nottingham represented at the top of the scale, though with less evidence of smaller northern towns prospering.
At this festive time of the year, it strikes me that readers might wish to follow the trail of Dick Whittington to the fair city of London with their hard earned pennies - or perhaps head off in the opposite direction to enjoy Hogmanay in Edinburgh.
According to Experian, both cities seem set to achieve amongst the best property growth profits in the months ahead.
But the prediction is that the level of damage on profitability will largely depend on where property investments are held.
It suggests the fall in property values will be disproportionate and irregular - and conversely, some areas of the UK are likely to see property prices continuing to rise.
Whenever the housing market is suffering a period of uncertainty, the press have a field day, making contrary predictions that are aimed at selling newspapers to an ever more nervous general public.
During the last few weeks we have seen a myriad of headlines announcing doom and gloom, then a few suggesting light at the end of the tunnel, then more doom and gloom - and finally, this week, the press have gone all out saying the meagre drop in interest rates won't help prevent a long-term property price crash.
Confused readers must wonder which headline is right - if any - and it seems much depends on the day of the week, which newspaper you buy, the town or city you buy it in and whether the sun is shining outside your window on that particular day.
After many years in this business, I am very aware that dramatic headlines spelling out turmoil and disaster tend to attract more attention (and sell more newspapers) than moderate and well-balanced reports of how it really is.
When an editor says 'use some journalistic license', they simply mean 'make it explosive', regardless of the facts.
More cautious view
As investors and homeowners, it is probably wise for us to take a cautious view of what the periodicals say and look rather more intensely to the experienced, analytical and rational opinion of 'people in the know', as it were.
More importantly, those with no axe to grind and no headline-driven profit to gain are more likely to offer a balanced view.
While it is sometimes very difficult to find a truly independent assessment of the state of the property market and where it might be heading, there are those whose opinions I personally value far greater than others.
Experian are one such company. They have nothing to gain from making dramatic or exaggerated warnings about chaos and catastrophe.
And in their favour, their day-to-day dealings in the property arena from both sides of the investment fence means they can assess more accurately the likely repercussions of the so-called credit crunch crisis.
Last month, Experian released an important and influential report following their study of market trends and ground-level property transaction activity. The report's conclusions surprised many commentators, but to date no one has actually disputed them.
50% of areas will see falls
According to the study, half the country will see house prices fall over an 18 month period, largely driven by the knock-on effects of the worldwide squeeze on credit.
Buyers are being discouraged and in some cases prohibited from purchasing property, because mortgage lenders have become much more restrictive about who they will lend to and how much they will lend.
This has removed a substantial volume of buyers from the market - and others are being discouraged from borrowing due to interest levels, adopting a 'wait and see' policy.
The eternal influence of supply and demand is now inflicting a downward pressure on property values, as competition bites in with more sellers scrambling for fewer potential buyers.
Experian predicts the biggest price fall of 4 per cent (considerably less than many newspapers are suggesting) will occur in the West Midlands by mid 2009.
A 3.7 per cent drop is predicted for the East Midlands, 2.8 per cent in the South West and 2 per cent in Northern Ireland.
It is anticipated that Northern Ireland will fair quite well, despite the price drop, because it has already experienced a remarkable boom period over the last two years with prices far exceeding average growth.
Andrew Burrell, on behalf of Experian, said: 'Five UK interest rate hikes since mid-2006 were already hitting consumer demand and global developments tightened the squeeze. The UK economy and housing market will become direct casualties of the current worldwide credit crunch.'
Slowing economic growth
He warned that economic growth would slow from just over 3 per cent this year to just over 2 per cent in 2008 and added: 'The downturn in consumer demand is more abrupt, with demand growing by less than 2 per cent year-on-year.
'Only significant reductions in interest rates bring an upturn from 2009. We expect the UK housing market to suffer over the next two years. House prices are forecast to record the lowest annual increase since the mid-1990s, while repossessions are also set to reach 15 year highs.'
The company suggest that London, with its city bonus culture and property shortage, will prop up the market with a 6 per cent increase anticipated in the capital.
Scotland is also expected to ride the storm with an encouraging 7.7 per cent rise in values predicted.
Experian envisage a more moderate 3 per cent increase for Wales and smaller property prices rises for the North East, Yorkshire and the North West.
However, even these encouraging predictions could be dislodged if mortgage providers and credit companies come under tighter pressure to curb lending.
Any instability created in the general consumer market is likely to spill over into the housing market.
This could enhance the expected impact, thus causing more damaging results. Under such circumstances, prices could fall in all regions of the UK, according to Experian.
Two year stagnation?
While many authorities are predicting a two-year long stagnation of the housing market, the International Monetary Fund suggests the effect of the worldwide credit crunch will actually cause a slump.
Other commentators, such as the online property consultants, Hometrack, say they have witnessed the number of prospective buyers registering with estate agents falling at a record pace ... and data released by the Bank of England shows mortgage approvals are at their lowest for two years.
Interestingly, the Citizens Advice Bureaux has confirmed that the rise in the cost of household bills and interest rates are now hitting families hard. The organisation said it has dealt with a record 1.7 million debt problems over the last year, which represents an alarming 20 per cent annual rise.
These statistics display the detrimental effect of rising living expenses on the most vulnerable people in our society ... and continued financial restrictions and tighter lending policies will do nothing to persuade first time buyers onto an uncertain and unstable housing ladder.
First time buyers are the foundation of the entire housing market and without them being in evidence in substantial numbers, it is certain to suffer. This is therefore a time when investors need reliable data to make important strategic decisions over which assets to keep and which to dispose of.
By my reckoning, Experian's report offers some useful if not vital pointers.
Smaller southern towns to fare best.
In the final analysis, the report says there are signs of bias towards the smaller southern towns in its forecast rankings.
As in the past, Brighton, Milton Keynes, Ipswich and Peterborough show some of the UK's most vigorous growth.
There also remains some strong northern city presence, with Leeds, Cardiff, Edinburgh and Nottingham represented at the top of the scale, though with less evidence of smaller northern towns prospering.
At this festive time of the year, it strikes me that readers might wish to follow the trail of Dick Whittington to the fair city of London with their hard earned pennies - or perhaps head off in the opposite direction to enjoy Hogmanay in Edinburgh.
According to Experian, both cities seem set to achieve amongst the best property growth profits in the months ahead.
stimmers said:
...Experian are one such company. They have nothing to gain from making dramatic or exaggerated warnings about chaos and catastrophe.
And in their favour, their day-to-day dealings in the property arena from both sides of the investment fence means they can assess more accurately the likely repercussions of the so-called credit crunch crisis...
There is another way of reading that. That is, if Experian do have no vested interest in the property market, why would they spend a lot of time researching it? Unless they really havent and the story has another spin in which of course they do!And in their favour, their day-to-day dealings in the property arena from both sides of the investment fence means they can assess more accurately the likely repercussions of the so-called credit crunch crisis...
Of course Experian make their money from people looking for credit who are looking after their credit file. This announcement advocates both rises and falls... So this really affects those looking to invest and also those looking to remortgage or refinance - NOW is the time to do it before your house is devalued and you cant borrow any more...
IMHO I will take it with the same pinch of salt I will take the also vested 'predictions' of the estate agents!
Edited by JustinP1 on Tuesday 15th January 23:32
JustinP1 said:
There is another way of reading that. That is, if Experian do have no vested interest in the property market, why would they spend a lot of time researching it? ...IMHO I will take it with the same pinch of salt I will take the also vested 'predictions' of the estate agents!
As a volume housebuilder, we have a vested interest in getting our market predictions [i]right[i], so that we neither pay over the odds for land, or are unduly pessimistic and allow our competitors to gain an edge.The research we have suggests a rather different picture.
I keep hearing figures mentioned about how London property is going to go do 10%, 15% etc etc. Well in the last big 'crash' i think im right in thinking that no property went down more than 1.5% and in most cases it hardly moved. If London property prices go down 10% or more, does everyone not think that quite a few people will start buying, which in turn will do what to the market ???
You can say London property is over-priced, but you have to realise that there are plenty of people who were buying these over-priced property. In fact until the USA sub prime stuff, there were 3 buyers to every 1 property north of the river. If you think ALL these buyers were over stretching themselves with mortgages they can't afford from companies happy to lend out the money, you'd better think again.
At the moment, London property is not selling, but has anyone taken a look at the rental market. Its just as over priced and mad as the sales side was recently. People have stopped buying property waiting for the big 'crash', yet they are spending huge sums on renting !!! Its shows there are still a LOT of people spending a LOT of money on property in London. I can't believe the rentals i have been getting on property no one wants to buy at the moment. Im quite happy.
I also don't think the majority of the UK is actually over-priced at all, i think there are very few areas that will see a good amount of % reductions in price.
Just My Opinion though
You can say London property is over-priced, but you have to realise that there are plenty of people who were buying these over-priced property. In fact until the USA sub prime stuff, there were 3 buyers to every 1 property north of the river. If you think ALL these buyers were over stretching themselves with mortgages they can't afford from companies happy to lend out the money, you'd better think again.
At the moment, London property is not selling, but has anyone taken a look at the rental market. Its just as over priced and mad as the sales side was recently. People have stopped buying property waiting for the big 'crash', yet they are spending huge sums on renting !!! Its shows there are still a LOT of people spending a LOT of money on property in London. I can't believe the rentals i have been getting on property no one wants to buy at the moment. Im quite happy.
I also don't think the majority of the UK is actually over-priced at all, i think there are very few areas that will see a good amount of % reductions in price.
Just My Opinion though
I heard from my estate Agency in SW London today and they told me the market is now relatively strong in the area and they have a lot more people signing up to lok at property in the £750k to £1.5million bracket.
They also confirmed the rental market is seriously strong
Its going to be very interesting to see what ACTUALLY happens in the next 12 months.
They also confirmed the rental market is seriously strong
Its going to be very interesting to see what ACTUALLY happens in the next 12 months.
Edited by stimmers on Wednesday 16th January 10:52
stimmers said:
I heard from my estate Agency in SW London today and they told me the market is now relatively strong in the area and they have a lot more people signing up to lok at property in the £750k to £1.5million bracket.
They also confirmed the rental market is seriously strong
We are really going to have to get you a book on how to link people and businesses 'free advice' with how this might benefit their own interests which might affect their bias slightly... They also confirmed the rental market is seriously strong
JustinP1 said:
stimmers said:
I heard from my estate Agency in SW London today and they told me the market is now relatively strong in the area and they have a lot more people signing up to lok at property in the £750k to £1.5million bracket.
They also confirmed the rental market is seriously strong
We are really going to have to get you a book on how to link people and businesses 'free advice' with how this might benefit their own interests which might affect their bias slightly... They also confirmed the rental market is seriously strong
Ok, hows about some facts for you. Haven't had a single viewing on a house i have for sale in 2 months. I have 2 viewings today and 3 for the rest of the week. Also, my estate agent in that office, is one of my best friends.
So, maybe i'll get you a book on 'Don't be so cynical' I own and run two property business and have done pretty well over the years.
stimmers said:
JustinP1 said:
stimmers said:
I heard from my estate Agency in SW London today and they told me the market is now relatively strong in the area and they have a lot more people signing up to lok at property in the £750k to £1.5million bracket.
They also confirmed the rental market is seriously strong
We are really going to have to get you a book on how to link people and businesses 'free advice' with how this might benefit their own interests which might affect their bias slightly... They also confirmed the rental market is seriously strong
Ok, hows about some facts for you. Haven't had a single viewing on a house i have for sale in 2 months. I have 2 viewings today and 3 for the rest of the week. Also, my estate agent in that office, is one of my best friends.
So, maybe i'll get you a book on 'Don't be so cynical' I own and run two property business and have done pretty well over the years.
What I am saying is that advice from those with limited or vested interests is just as good as that. I have not yet been into an estate agency where they tell me the market is falling - it will always be optomistic from the to you so that it will bolster your own thoughts on either buying, selling or investing!
I am sure in the same way when you are selling/renting your properties, your potential clients will be pointed out what you want to tell them, naturally in order to sell. For example, you are not going to stress the dodgy points in the corner of the ceiling you know about or how they can get an independant list down the road where they can get a property the same size and spec a bit cheaper...
All of these predictions are simply that. Indeed, they are worse than that because their evidence maybe biased or annecdotal of affected for very different reasons than they think.
For example, those that predict a 10% fall, a 20% fall or whatever, what financial situation is that based upon? Whether interest rates are at their current rate or whether they are 1% lower in a years time throw that out of the window. It is about as useful as me making a prediction on whether I will need to wear a raincoat tomorrow without really any knowledge whether it will rain or not!
In my completely personal opinion - which you can take as much notice in as the others or none as at all, if house prices remain stable for six months and then interest rates fall, then things are on the up again. You can't get around the laws or supply and demand, only regulate them.
stimmers said:
I keep hearing figures mentioned about how London property is going to go do 10%, 15% etc etc. Well in the last big 'crash' i think im right in thinking that no property went down more than 1.5% and in most cases it hardly moved.
http://www.noelwatson.com/blog/content/binary/londonprices.jpgIn some cases prices fell by over 30%, unadjusted for inflation, which was higher than currently
stimmers said:
According to a new report by the highly respected credit reference agency, Experian, house prices will fall throughout most of the UK over the next 18 months.
But the prediction is that the level of damage on profitability will largely depend on where property investments are held.
It suggests the fall in property values will be disproportionate and irregular - and conversely, some areas of the UK are likely to see property prices continuing to rise.
Whenever the housing market is suffering a period of uncertainty, the press have a field day, making contrary predictions that are aimed at selling newspapers to an ever more nervous general public.
During the last few weeks we have seen a myriad of headlines announcing doom and gloom, then a few suggesting light at the end of the tunnel, then more doom and gloom - and finally, this week, the press have gone all out saying the meagre drop in interest rates won't help prevent a long-term property price crash.
Confused readers must wonder which headline is right - if any - and it seems much depends on the day of the week, which newspaper you buy, the town or city you buy it in and whether the sun is shining outside your window on that particular day.
After many years in this business, I am very aware that dramatic headlines spelling out turmoil and disaster tend to attract more attention (and sell more newspapers) than moderate and well-balanced reports of how it really is.
When an editor says 'use some journalistic license', they simply mean 'make it explosive', regardless of the facts.
More cautious view
As investors and homeowners, it is probably wise for us to take a cautious view of what the periodicals say and look rather more intensely to the experienced, analytical and rational opinion of 'people in the know', as it were.
More importantly, those with no axe to grind and no headline-driven profit to gain are more likely to offer a balanced view.
While it is sometimes very difficult to find a truly independent assessment of the state of the property market and where it might be heading, there are those whose opinions I personally value far greater than others.
Experian are one such company. They have nothing to gain from making dramatic or exaggerated warnings about chaos and catastrophe.
And in their favour, their day-to-day dealings in the property arena from both sides of the investment fence means they can assess more accurately the likely repercussions of the so-called credit crunch crisis.
Last month, Experian released an important and influential report following their study of market trends and ground-level property transaction activity. The report's conclusions surprised many commentators, but to date no one has actually disputed them.
50% of areas will see falls
According to the study, half the country will see house prices fall over an 18 month period, largely driven by the knock-on effects of the worldwide squeeze on credit.
Buyers are being discouraged and in some cases prohibited from purchasing property, because mortgage lenders have become much more restrictive about who they will lend to and how much they will lend.
This has removed a substantial volume of buyers from the market - and others are being discouraged from borrowing due to interest levels, adopting a 'wait and see' policy.
The eternal influence of supply and demand is now inflicting a downward pressure on property values, as competition bites in with more sellers scrambling for fewer potential buyers.
Experian predicts the biggest price fall of 4 per cent (considerably less than many newspapers are suggesting) will occur in the West Midlands by mid 2009.
A 3.7 per cent drop is predicted for the East Midlands, 2.8 per cent in the South West and 2 per cent in Northern Ireland.
It is anticipated that Northern Ireland will fair quite well, despite the price drop, because it has already experienced a remarkable boom period over the last two years with prices far exceeding average growth.
Andrew Burrell, on behalf of Experian, said: 'Five UK interest rate hikes since mid-2006 were already hitting consumer demand and global developments tightened the squeeze. The UK economy and housing market will become direct casualties of the current worldwide credit crunch.'
Slowing economic growth
He warned that economic growth would slow from just over 3 per cent this year to just over 2 per cent in 2008 and added: 'The downturn in consumer demand is more abrupt, with demand growing by less than 2 per cent year-on-year.
'Only significant reductions in interest rates bring an upturn from 2009. We expect the UK housing market to suffer over the next two years. House prices are forecast to record the lowest annual increase since the mid-1990s, while repossessions are also set to reach 15 year highs.'
The company suggest that London, with its city bonus culture and property shortage, will prop up the market with a 6 per cent increase anticipated in the capital.
Scotland is also expected to ride the storm with an encouraging 7.7 per cent rise in values predicted.
Experian envisage a more moderate 3 per cent increase for Wales and smaller property prices rises for the North East, Yorkshire and the North West.
However, even these encouraging predictions could be dislodged if mortgage providers and credit companies come under tighter pressure to curb lending.
Any instability created in the general consumer market is likely to spill over into the housing market.
This could enhance the expected impact, thus causing more damaging results. Under such circumstances, prices could fall in all regions of the UK, according to Experian.
Two year stagnation?
While many authorities are predicting a two-year long stagnation of the housing market, the International Monetary Fund suggests the effect of the worldwide credit crunch will actually cause a slump.
Other commentators, such as the online property consultants, Hometrack, say they have witnessed the number of prospective buyers registering with estate agents falling at a record pace ... and data released by the Bank of England shows mortgage approvals are at their lowest for two years.
Interestingly, the Citizens Advice Bureaux has confirmed that the rise in the cost of household bills and interest rates are now hitting families hard. The organisation said it has dealt with a record 1.7 million debt problems over the last year, which represents an alarming 20 per cent annual rise.
These statistics display the detrimental effect of rising living expenses on the most vulnerable people in our society ... and continued financial restrictions and tighter lending policies will do nothing to persuade first time buyers onto an uncertain and unstable housing ladder.
First time buyers are the foundation of the entire housing market and without them being in evidence in substantial numbers, it is certain to suffer. This is therefore a time when investors need reliable data to make important strategic decisions over which assets to keep and which to dispose of.
By my reckoning, Experian's report offers some useful if not vital pointers.
Smaller southern towns to fare best.
In the final analysis, the report says there are signs of bias towards the smaller southern towns in its forecast rankings.
As in the past, Brighton, Milton Keynes, Ipswich and Peterborough show some of the UK's most vigorous growth.
There also remains some strong northern city presence, with Leeds, Cardiff, Edinburgh and Nottingham represented at the top of the scale, though with less evidence of smaller northern towns prospering.
At this festive time of the year, it strikes me that readers might wish to follow the trail of Dick Whittington to the fair city of London with their hard earned pennies - or perhaps head off in the opposite direction to enjoy Hogmanay in Edinburgh.
According to Experian, both cities seem set to achieve amongst the best property growth profits in the months ahead.
The betting exhchanges are pricing around 8% down for London by end of next year - they have proven to be accurate in predicitng U.S. marketsBut the prediction is that the level of damage on profitability will largely depend on where property investments are held.
It suggests the fall in property values will be disproportionate and irregular - and conversely, some areas of the UK are likely to see property prices continuing to rise.
Whenever the housing market is suffering a period of uncertainty, the press have a field day, making contrary predictions that are aimed at selling newspapers to an ever more nervous general public.
During the last few weeks we have seen a myriad of headlines announcing doom and gloom, then a few suggesting light at the end of the tunnel, then more doom and gloom - and finally, this week, the press have gone all out saying the meagre drop in interest rates won't help prevent a long-term property price crash.
Confused readers must wonder which headline is right - if any - and it seems much depends on the day of the week, which newspaper you buy, the town or city you buy it in and whether the sun is shining outside your window on that particular day.
After many years in this business, I am very aware that dramatic headlines spelling out turmoil and disaster tend to attract more attention (and sell more newspapers) than moderate and well-balanced reports of how it really is.
When an editor says 'use some journalistic license', they simply mean 'make it explosive', regardless of the facts.
More cautious view
As investors and homeowners, it is probably wise for us to take a cautious view of what the periodicals say and look rather more intensely to the experienced, analytical and rational opinion of 'people in the know', as it were.
More importantly, those with no axe to grind and no headline-driven profit to gain are more likely to offer a balanced view.
While it is sometimes very difficult to find a truly independent assessment of the state of the property market and where it might be heading, there are those whose opinions I personally value far greater than others.
Experian are one such company. They have nothing to gain from making dramatic or exaggerated warnings about chaos and catastrophe.
And in their favour, their day-to-day dealings in the property arena from both sides of the investment fence means they can assess more accurately the likely repercussions of the so-called credit crunch crisis.
Last month, Experian released an important and influential report following their study of market trends and ground-level property transaction activity. The report's conclusions surprised many commentators, but to date no one has actually disputed them.
50% of areas will see falls
According to the study, half the country will see house prices fall over an 18 month period, largely driven by the knock-on effects of the worldwide squeeze on credit.
Buyers are being discouraged and in some cases prohibited from purchasing property, because mortgage lenders have become much more restrictive about who they will lend to and how much they will lend.
This has removed a substantial volume of buyers from the market - and others are being discouraged from borrowing due to interest levels, adopting a 'wait and see' policy.
The eternal influence of supply and demand is now inflicting a downward pressure on property values, as competition bites in with more sellers scrambling for fewer potential buyers.
Experian predicts the biggest price fall of 4 per cent (considerably less than many newspapers are suggesting) will occur in the West Midlands by mid 2009.
A 3.7 per cent drop is predicted for the East Midlands, 2.8 per cent in the South West and 2 per cent in Northern Ireland.
It is anticipated that Northern Ireland will fair quite well, despite the price drop, because it has already experienced a remarkable boom period over the last two years with prices far exceeding average growth.
Andrew Burrell, on behalf of Experian, said: 'Five UK interest rate hikes since mid-2006 were already hitting consumer demand and global developments tightened the squeeze. The UK economy and housing market will become direct casualties of the current worldwide credit crunch.'
Slowing economic growth
He warned that economic growth would slow from just over 3 per cent this year to just over 2 per cent in 2008 and added: 'The downturn in consumer demand is more abrupt, with demand growing by less than 2 per cent year-on-year.
'Only significant reductions in interest rates bring an upturn from 2009. We expect the UK housing market to suffer over the next two years. House prices are forecast to record the lowest annual increase since the mid-1990s, while repossessions are also set to reach 15 year highs.'
The company suggest that London, with its city bonus culture and property shortage, will prop up the market with a 6 per cent increase anticipated in the capital.
Scotland is also expected to ride the storm with an encouraging 7.7 per cent rise in values predicted.
Experian envisage a more moderate 3 per cent increase for Wales and smaller property prices rises for the North East, Yorkshire and the North West.
However, even these encouraging predictions could be dislodged if mortgage providers and credit companies come under tighter pressure to curb lending.
Any instability created in the general consumer market is likely to spill over into the housing market.
This could enhance the expected impact, thus causing more damaging results. Under such circumstances, prices could fall in all regions of the UK, according to Experian.
Two year stagnation?
While many authorities are predicting a two-year long stagnation of the housing market, the International Monetary Fund suggests the effect of the worldwide credit crunch will actually cause a slump.
Other commentators, such as the online property consultants, Hometrack, say they have witnessed the number of prospective buyers registering with estate agents falling at a record pace ... and data released by the Bank of England shows mortgage approvals are at their lowest for two years.
Interestingly, the Citizens Advice Bureaux has confirmed that the rise in the cost of household bills and interest rates are now hitting families hard. The organisation said it has dealt with a record 1.7 million debt problems over the last year, which represents an alarming 20 per cent annual rise.
These statistics display the detrimental effect of rising living expenses on the most vulnerable people in our society ... and continued financial restrictions and tighter lending policies will do nothing to persuade first time buyers onto an uncertain and unstable housing ladder.
First time buyers are the foundation of the entire housing market and without them being in evidence in substantial numbers, it is certain to suffer. This is therefore a time when investors need reliable data to make important strategic decisions over which assets to keep and which to dispose of.
By my reckoning, Experian's report offers some useful if not vital pointers.
Smaller southern towns to fare best.
In the final analysis, the report says there are signs of bias towards the smaller southern towns in its forecast rankings.
As in the past, Brighton, Milton Keynes, Ipswich and Peterborough show some of the UK's most vigorous growth.
There also remains some strong northern city presence, with Leeds, Cardiff, Edinburgh and Nottingham represented at the top of the scale, though with less evidence of smaller northern towns prospering.
At this festive time of the year, it strikes me that readers might wish to follow the trail of Dick Whittington to the fair city of London with their hard earned pennies - or perhaps head off in the opposite direction to enjoy Hogmanay in Edinburgh.
According to Experian, both cities seem set to achieve amongst the best property growth profits in the months ahead.
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