How far will house prices fall [volume 4]
Discussion
The Treasury has said house prices could be hit by between 10% and 18% over the next two years, compared to where they otherwise would have been. This would be good news for first-time buyers, but not so great for existing homeowners.
How might the EU exit affect average house prices?
Year By leaving EU If UK had remained in EU
2016 £277,600 £278,500
2017 £288,900 £290,800
2018 £300,800 £303,000
London
2016 £533,700 £536,000
2017 £559,300 £564,500
2018 £591,700 £599,200
Source: http://www.bbc.co.uk/news/business-36537906
Playing devils advocate, I was wondering if Osborne saw the dramatic slowing of house prices and thought he could blame it on Brexit should it occur.
I think everything is all a little untenable for Osborne right now.
Referring to an earlier post: The point about the 3 tiers of people earlier is no doubt absolutely right, but it's interesting that people I know including BTL'ers, developers e.t.c are now genuinely worried and are talking about the limits of how far they think it will drop and what is serviceable.
I personally don't expect a huge drop this year, more realistically I suspect further reduction on volumes and a modest drop of a few percent. However there will be the odd bargain, there already was before brexit with some properties being about £100k less than the market average. It is 2017 imo that is more likely to be interesting for larger drops, if we see 5-6 months of negative growth that will be the reality check for anyone on the fence about drops and the impact of uncertainly in the market.
How might the EU exit affect average house prices?
Year By leaving EU If UK had remained in EU
2016 £277,600 £278,500
2017 £288,900 £290,800
2018 £300,800 £303,000
London
2016 £533,700 £536,000
2017 £559,300 £564,500
2018 £591,700 £599,200
Source: http://www.bbc.co.uk/news/business-36537906
V6Alfisti said:
Croutons said:
Struggling to find anything other than second hand reporting on it- end 1St para here is a pointer, will dig more later if I can
http://www.dailymail.co.uk/news/article-3601854/No...
Osborne is well known for this mind, I remember seeing a post budget interview with him where he repeated the phrase "we've reduced the deficit by one third" probably 20 times in 3 minutes when he'd done no such thing. The rate of growth of the deficit was reduced by 1/3 against the estimate, but he chose to twist...
Thanks Croutons, sorry that I asked (I hate lazy buggers that can't search for things themselves!). I was struggling to find the direct source too.http://www.dailymail.co.uk/news/article-3601854/No...
Osborne is well known for this mind, I remember seeing a post budget interview with him where he repeated the phrase "we've reduced the deficit by one third" probably 20 times in 3 minutes when he'd done no such thing. The rate of growth of the deficit was reduced by 1/3 against the estimate, but he chose to twist...
Playing devils advocate, I was wondering if Osborne saw the dramatic slowing of house prices and thought he could blame it on Brexit should it occur.
I think everything is all a little untenable for Osborne right now.
Referring to an earlier post: The point about the 3 tiers of people earlier is no doubt absolutely right, but it's interesting that people I know including BTL'ers, developers e.t.c are now genuinely worried and are talking about the limits of how far they think it will drop and what is serviceable.
I personally don't expect a huge drop this year, more realistically I suspect further reduction on volumes and a modest drop of a few percent. However there will be the odd bargain, there already was before brexit with some properties being about £100k less than the market average. It is 2017 imo that is more likely to be interesting for larger drops, if we see 5-6 months of negative growth that will be the reality check for anyone on the fence about drops and the impact of uncertainly in the market.
okgo said:
anonymous said:
[redacted]
What's her reasoning?
18% is a huge chunk was it comically priced ?
I dropped mine just enough to appear in the lower search band on Rightmove (albeit easier to do in the lower price range than the higher ones)
V6Alfisti said:
Sell in 5-10 years when interest rates are higher = No idea, but I wouldn't say positive.
Never in the history of recorded figures have average house prices been lower than they were 10 years previously.Edited by V6Alfisti on Saturday 25th June 00:15
I get it that you're currently renting and paying off someone else's mortgage but no need to be bitter about it
NerveAgent said:
A whole bunch of previously sold STC have reappeared in my search area this morning. Not sure how this compares to the norm as I've not previously taken as much notice.
A few places down my road have been STC in recent weeks, none of them have come back on yet... also nothing in the 1 mile area that's been sold and come back on yet, but I'll be watching - I actually hope it does all go down (a bit) I've got a house to sell but most of our moving money is in the bank waiting...Dromedary66 said:
V6Alfisti said:
Sell in 5-10 years when interest rates are higher = No idea, but I wouldn't say positive.
Never in the history of recorded figures have average house prices been lower than they were 10 years previously.Edited by V6Alfisti on Saturday 25th June 00:15
I get it that you're currently renting and paying off someone else's mortgage but no need to be bitter about it
That said as a house owner.
Dromedary66 said:
Never in the history of recorded figures have average house prices been lower than they were 10 years previously.
I get it that you're currently renting and paying off someone else's mortgage but no need to be bitter about it
I said 5-10 years, there are a few different factors at play now. Including prices being inflated to levels that have never been seen before, with large amounts of that investment from BTL'ers (now there are more and more controls coming in), with incredibly low interest rates that are giving lots of people very cheap money/debt.I get it that you're currently renting and paying off someone else's mortgage but no need to be bitter about it
The comment was more around the interest rate rises which will probably start to hit around that period. That will not end well given the current debt levels that people have taken on with super inflated prices.
So as I see it, we have the impact now and then another hit when interest rates start to go up in the medium to longer term. Not 10 years of pure drop.. The market will find it's level before then and adjust to its own circumstances.
Dromedary66 said:
V6Alfisti said:
Sell in 5-10 years when interest rates are higher = No idea, but I wouldn't say positive.
Never in the history of recorded figures have average house prices been lower than they were 10 years previously.Edited by V6Alfisti on Saturday 25th June 00:15
I get it that you're currently renting and paying off someone else's mortgage but no need to be bitter about it
V6Alfisti said:
Dromedary66 said:
Never in the history of recorded figures have average house prices been lower than they were 10 years previously.
I get it that you're currently renting and paying off someone else's mortgage but no need to be bitter about it
I said 5-10 years, there are a few different factors at play now. Including prices being inflated to levels that have never been seen before, with large amounts of that investment from BTL'ers (now there are more and more controls coming in), with incredibly low interest rates that are giving lots of people very cheap money/debt.I get it that you're currently renting and paying off someone else's mortgage but no need to be bitter about it
The comment was more around the interest rate rises which will probably start to hit around that period. That will not end well given the current debt levels that people have taken on with super inflated prices.
So as I see it, we have the impact now and then another hit when interest rates start to go up in the medium to longer term. Not 10 years of pure drop.. The market will find it's level before then and adjust to its own circumstances.
The decision is yours, of course but don't get sucked into reading headline waffle. Most property news is based around London and even then, a certain part of London. You don't want to be in a position where banks make mortgages more difficult for first time buyers and you are in effect, locked out. The normal rules of demand and supply apply and whilst there is some sentiment driving short term decisions, nothing has changes otherwise
Burwood said:
But if anything interest rates will fall because stimulating growth/spending is far more important than trying to shore up the currency. Back in the mid 90's a colleague (Australian) was after his first property. He thought values too high then and waited, and waited then moaned about Leasehold titles because in Australia it's all Freehold. In the end he did buy. I think in around 2001. Only after values had doubled from them he first started looking. History can show that those who decide to sit on the fence will end up maying more in the long run because they become obsessed by the decision and find themselves incapable of actually pulling the trigger.
The decision is yours, of course but don't get sucked into reading headline waffle. Most property news is based around London and even then, a certain part of London. You don't want to be in a position where banks make mortgages more difficult for first time buyers and you are in effect, locked out. The normal rules of demand and supply apply and whilst there is some sentiment driving short term decisions, nothing has changes otherwise
How much interest rate fall (on houses) do you actually see? Pretty much any decrease now and you don't actually change the interest rates because the banks need to cover the risk of lending large amounts of money. And you think that interest rates will be lower in 5-10 years time than they are now? I don't. I agree generally it's best not to wait too long when buying a house (I didn't), but if I was in the market now for buying for the first time I think I'd sit tight for 1/2 year or so and see what happens with everything. I think there are some big differences between someone who is scared of taking a big step and never buying because of excuses, and indicators from what we are seeing now.The decision is yours, of course but don't get sucked into reading headline waffle. Most property news is based around London and even then, a certain part of London. You don't want to be in a position where banks make mortgages more difficult for first time buyers and you are in effect, locked out. The normal rules of demand and supply apply and whilst there is some sentiment driving short term decisions, nothing has changes otherwise
NRS said:
Burwood said:
But if anything interest rates will fall because stimulating growth/spending is far more important than trying to shore up the currency. Back in the mid 90's a colleague (Australian) was after his first property. He thought values too high then and waited, and waited then moaned about Leasehold titles because in Australia it's all Freehold. In the end he did buy. I think in around 2001. Only after values had doubled from them he first started looking. History can show that those who decide to sit on the fence will end up maying more in the long run because they become obsessed by the decision and find themselves incapable of actually pulling the trigger.
The decision is yours, of course but don't get sucked into reading headline waffle. Most property news is based around London and even then, a certain part of London. You don't want to be in a position where banks make mortgages more difficult for first time buyers and you are in effect, locked out. The normal rules of demand and supply apply and whilst there is some sentiment driving short term decisions, nothing has changes otherwise
How much interest rate fall (on houses) do you actually see? Pretty much any decrease now and you don't actually change the interest rates because the banks need to cover the risk of lending large amounts of money. And you think that interest rates will be lower in 5-10 years time than they are now? I don't. I agree generally it's best not to wait too long when buying a house (I didn't), but if I was in the market now for buying for the first time I think I'd sit tight for 1/2 year or so and see what happens with everything. I think there are some big differences between someone who is scared of taking a big step and never buying because of excuses, and indicators from what we are seeing now.The decision is yours, of course but don't get sucked into reading headline waffle. Most property news is based around London and even then, a certain part of London. You don't want to be in a position where banks make mortgages more difficult for first time buyers and you are in effect, locked out. The normal rules of demand and supply apply and whilst there is some sentiment driving short term decisions, nothing has changes otherwise
Burwood said:
...the same agents report increased enquiry as the vote result removes uncertainty. Life goes on.
The certain thing is that the uncertainty has just begun with so many unknowns for the short term, not to mention possible sentiment change over the long term and less stable money markets...Sure life goes on. It has suddenly become much more interesting...
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