House Prices - what are they going to do over the next few years?

[FlyingPirates]

AS the title asks. Are we now at the bottome of the market, and therefore it is a good time (if you can get a mortgage as they are so hard to get atm) to buy?

Or should we wait a few months and try then?

What do the 'experts' predict atm?

I think I saw on here a few weeks ago someone quoting from the economist that prices are set to rise 21% over the next five years?But that seems crazy!

So basically, do we jump or do we wait?

where we are, property is still moving. often for a bit under the asking price, but not masses.

we are looking to buy atm, and have lost out on 3 houses recently - one we prevaricated too long; another our offer (about 4% under the asking price) was rejected, and another accepted; the third we didn't even get to view - it was on the market for about 4 days, and snapped up at the asking price (which was very reasonable considering location etc).

it does all depend on the area you are in, and the type of house you are after. there are houses hanging around here as well - I can only assume they will not budge from asking price. we have viewed some of them, but none suited us (room size/layout), which may also be a factor in their hanging about.

can't see the market going into freefall round here - 3 houses have sold on our road (we rent) in the last year - the cheapest for 750k, the most expensive for £1.4million. rental market also overpriced, but there are enough people to fill it - we pay extortionate rent for our (admittedly very nice, very large) house, which is why we need to buy - it will cut our outgoings by about a third at least (although the house we buy will not be in the same league at all)

Well you can expect inflation to be back, as there are lots of government debts now. Governments like inflation as it reduces the value of their debt.

Suppose we had 5% inflation for five years, and you can see what ought to happen to nominal prices of houses, as well as the nominal prive of a loaf of bread, a bottle of milk, a postman's wages or a pension.

However the old days, when people used to think that asset price inflation of houses was a good thing, and they could continue increasing in price faster than earnings, so that eventually a house would cost an infinite amount more than a salary, are hopefully gone.

If you look at a house the same as you would anything else; as a thing you need one of, then it doesn't much matter if prices move up and down. You need one, you have one. If you sell the house you have and buy another, it doesn't much matter if they've both doubled or both halved. There was scope for making profits by speculating on houses when the cost of borrowing was less than the price inflation, we have also seen that highly-geared speculation can lead to big losses. Let's hope things have calmed down for another 20 years.

I think you need to look long term and agree with poster who suggested you may kick yourself if you wait for the market to drop further. The only way you lose is if you end up in negative equity and have to sell your house. IME we went for far less than the bank were prepared to lend, working on house needing modernisation/ refurbishment. We only sold when house prices went up hence making a bit of a profit. This we did several times before our present home. We are doing final bedroom now and have a feeling dh will suggest one more move. What you have to ask for each potential property is could we still afford the mortgage if faced with redundancy or 16% interest rates like thatcher brought in. Cover all eventualities and go for it. If you can't I'd say err on caution as all markets are unstable atm.

I am not sure you are looking at it the right way. Look at this:-

If I buy a 300k house @3% and it decreases in value by 20% over that time, I end up paying 170.5k more than the house is worth.
If I buy a 300k house @6% and it increases in value by 20% over that time, I still end up paying a total of 226k more than the house is worth.

So, I think you should be more worried about interest rates than house prices. Years of bad deals have taught me that there's no point in betting against the bank. They have better information than you and you will lose. And as most 10 year fixed rates are about 5%, you can be pretty sure that that the banks think that the rate will be under 5% for the next 10 years or so.

95% mortgages are back. The government will do anything to avoid a crash, that was clear back in 2007.
The website HPC has been predicting the end of the world since 2002 and most on there would admit they got it wrong and now have to cling on to the idea that there will be a crash because the truth is they should be 10 years into clearing their mortgages by now.