To think there must be a fall in house prices?

[Explaintome]

And not really understand why it hasn't already?

I understand people with existing fixed mortgages aren't affected immediately, but anyone buying now is.

Or is the stamp duty thing enough to negate the interest rates effects?

I'm not necessarily saying a crash but surely there must be some fall in prices?

It's interesting and something to keep a close eye on. I am no economist by a long shot but yes, there will be a fall but it is unlikely that the fall will be a 40% drop in house prices in the next 6 months... but perhaps over the next 5-10 years... IF house prices drop (which I can't imagine, in this economic environment, they'd remain inflated as they have for years now). My armchair prediction is that house prices will fall around 10% over the next year. And that prediction is based on the guesses and predictions of others; educated experts (unlike me!) who themselves don't really know.
But the reaction of mortgage lenders is hugely telling and judging by that news, you can bet the housing market is about to become very unstable.

There are a lot of different factors. For one thing markets are reflecting what happened in the past, eg house sales agreed 5/6 months ago when the landscape looked quite different are still feeding through. And many people are on fixed mortgages with fixers not due to end yet.

I doubt we will see prices month on month anymore but it will be more about what the market looks like next yr & the yr after that.

And of course some people won't want to sell for a lower price so supply will shrink.

But I don't see how you can have high prices & high interest rates.

Expensive areas will stagnate & you will see more growth in cheaper areas at the bottom end of the market hence the stamp duty change & 30 yr mortgages.

Prime central London will probably be ok as will attract investors due to value of the pound. But the huge equity gains of the past are over for most.

I've been predicting a correction in the housing market for 20 years. Hasn't happened yet. You'd think it might now with interest rates and cost of living spiralling but I wouldn't be surprised if the market holds up. One factor is that private landlords are now a major part of the overall market. Many of them fund their property purchases through borrowing and will seek to increase rents to compensate for rising interest rates. If rents rise it's hard to imagine that property prices will go in the opposite direction. We might get a small correction but I doubt we'll see a major one. Certainly not as long as we have a Conservative government. There are many tactics they can employ to pump money into they housing market and their core support will expect them to.

The fact is the demand outstrips supply, and people need somewhere to live, so they will keep buying houses - just stretching themselves more and more to do so.

Long term house prices will keep rising, even if there is a temporary dip in some areas. But growth will slow.

Let's not forget that the Tories have just announced they're relaxing planning regs so expect a ton of new builds to be popping up everywhere to counteract the housing shortage we have in this country, so over the next few years supply will increase which should lessen demand which should (I am guessing) stablise house prices longer term and stop insane value increases. But it's not an immediate solution as we can't make up the housing shortfall overnight and how much house prices may decrease depends on so many things - eg 2 &3 bed semis with a garden in a decent area are probably going to feel a crash less because they'll always be starter homes and will always be in demand because they're the affordable option for many.

My friend sold his flat 30 years ago. He was expecting house prices to plummet so he could get a whole house for what he sold the flat for.

He has never managed to get back on the property ladder

They won’t fall by any meaningful amount, they will just stop increasing.

The fact is the demand outstrips supply, and people need somewhere to live, so they will keep buying houses - just stretching themselves more and more to do so.

cheap borrowing makes a difference.

Property prices are still increasing where I live

We are continually been ‘beaten’ at houses by cash buyers. Although this will affect sellers too who then won’t have as much cash to buy.

We have been looking for around three years and it’s looking unlikely now as what we could afford three years ago is not what we could afford now.

Sigh!

If inflation leads to big wage growth like in the 70s then house prices won't fall but the data isn't showing wage growth doing that.

Bit concerned that with the £ tanking, there will be many overseas investors interested in the UK property market. The govt needs to legislate to prevent this happening. But they won't.

People who had a 1% mortgage deal & whose fix ends in the next yr or so & are looking at 5/6% rates are going to have a shock particularly when you factor in the other increases eg energy, food

I think people are deluding themselves if they think there won't be an impact.

There are so many problems happening all at once: utility bills and mortgages going up for individuals, businesses struggling to pay bills and to export with the Brexit mess, banks being more cautious with lending, Pound going down and also the uncertainty of two more years of a Tory government that goes from one disaster to another.

So there might not be a huge crash but there will be a slow down and prices cooling off. Properties were already being reduced in many areas so that is going to continue. Maybe not in the most desirable but still.

There are always quite a few people who have over-stretched themselves massively with mortgages and if rates go up they will be in serious trouble quite quickly.

There should be a fall in house prices, but there won't be one. Eg. If they go up 4% this year they'll come down 3% next year. 3% drop on a £300,000 house means it'll be £291,000. They aren't going to be falling like 40% or anything.

House prices are quite "sticky". It takes a long time for changes in things like the available financing to move through to actual prices in the market.

People rightly or wrongly have a lot of confidence in housing as a good asset. So it will take a long time to have that confidence eroded and to have sentiment change. But when and if the confidence does finally go, it generally goes with an absolute bang. That's why there are rarely slow declines in prices, but significant crashes.

The fundamentals are all there for a significant house price crash. But to paraphrase a well know saying, the housing market can often stay illogical for a lot longer than people are willing to put off buying a house.

The prices houses are being advertised at are not the price people are paying for them.

I've been keeping an eye on some houses we viewed when we were buying just out of interest.

Our house sold for just over asking. The house we bought we paid £50k under. All the houses we viewed that have sold have sold for under asking - ranging from £10k to the £50k I just mentioned.

Those that haven't yet sold have reduced their prices.

My son is buying just had his mortgage approved .
he’s doing shared ownership because although he has a big deposit of 50k his wage isn’t enough to buy outright so shared ownership it is .
he is buying a 2 bed -2 bath so if he needs to he can rent out a room if things get bad in the future and it’s a place that he is happy to stay in long term and for a flat it’s huge .

i think It’s probably the wrong time to buy right now with interest rates but his deposit should shield him any drop in price and its still around £600 a month cheaper to buy than rent the exact same apartment which is crazy
And he’s fixed for 5 years

He is also very very lucky in that the deposit fees and finishing the flat has all come from an inheritance so it’s cost him nothing to get on the property market ( if that makes sense )
he’s not had to save anything

There may be a small correction but o don’t think there’ll be a significant fall.

It varies everywhere because that is absolutely not the case where I am @girlmom21

@Yabado

There is absolutely no guarantee where the market will go in the future.

But my personal feeling is there has never been a better time in the past 15 years to wait and see what the market is going to do.

I don't think that they'll fall much. FTB will just end up with less that they otherwise would have (i.e. a 2 bed instead of a 3 bed, a flat instead of a house etc).

Times have changed and there is lot of foreign money going into the uk housing market. Rents are rising so if there is any dip, then investors will pile in.

Also, the cost of building (labour and materials) is at an all time high, so if prices dip, developers stop building, which will strangle an already very short supply.

House prices haven't been related to incomes for a very long time, so I don't know why people think that changing economic conditions is going to cause a crash.

@MidnightMeltdown

because of other costs going up.

bills, fees, food, insurances, car loans, etc if a couple are on modest wages with children there are limited ways to increase income.

I think it’s the accumulation of these things that means people will downsize, cuts any extra spending, budget differently and in big cities for some, the sums just don’t add up

@Nolongerteaching

It will be interesting to see what happens that's for sure.

If, as you say, people want to downsize, this will increase demand for smaller properties - the same ones that many first time buyers are after.