House prices to fall 14% next year

[GreenestValley]

www.thetimes.co.uk/article/house-prices-forecast-to-drop-by-14-next-year-lbj77clv2

What does everyone think? I’m looking to buy my first home and this makes me very nervous. Stamp duty reduction is obviously a benefit but if prices drop by this much waiting would be a far better choice... Eek. Anyone else in same position?

[BrieAndChilli]

@GreenestValley this is where we are. We could buy now and scrap the 15% deposit together and buy an ok house, but what I don’t want to do is kick myself in 6 months time when I realise that we could have got a bigger house for the same price. Likewise I’m not worried about house prices dipping as we will be there for the long haul. And as FTB we don’t have a house to sell and worry about losing out if we sell next year rather than now.

[BeijingBikini]

I’m looking to buy for the long ish term so not expecting to / thinking about making any money on it. However, if I could wait a year and get something bigger for the same price, that would be a bigger saving to me than the stamp duty cut! My job is secure and we have a pretty decent deposit

This is literally us. I keep seeing nice houses on Rightmove and want to go for viewings.....but in the back of my mind is "what if we could get a nicer place on a nicer road for the same money in 6 months?". We viewed 25 places last time before pulling out once lockdown happened, so I don't want to do the same thing again.

[yellowymellowy]

@GreenestValley- I imagine someone guessed at April as the stamp duty holiday ends at the end of March. It is only a guess though as it is possible it will be extended or that the government make other adjustments to prop up the market further.

[Viviennemary]

Prices aren't showing much signs of falling. A few not very great houses pu up at grossly inflated prices have come down a measly amount. A lot are overpriced and some selling for more than they were before lockdown. I told the first time buyers I know to be patient. Hope I'm right.

[Newtomarket]

I think only distressed sales will happen in an economic downturn so the supply of nice houses will be low because no one being sensible would sell when the value of their house has fallen. People will only sell if they have to. So probate properties, divorcing people, repossession.

[organisedmother]

I think it depends on property and location, countryside, conservation and villages I think will maintain house prices but city and new builds may go down a bit but wouldn’t think 14% that seems a lot

[blueangel19]

I would say if you are buying long term buy now.

[Daisydoesnt]

Zombie thread! Interesting to see that article from what four months ago....no sign of prices falling yet but it still feels inevitable to me.

[LadyfromtheBelleEpoque]

@Newtomarket. I agree with you but at the same time think covid may change people’s priorities and it maybe too wary to tell how that affects the market esp once stamp d duty change finishes.

My old rents in London is empty - everyone moved out after Christmas so I think some may have been hholding out til then.

[mountains76]

[quote Lightscribe]I've said many times on here, that it's inevitable eventually that we will see a 15-20% drop nationally area dependent and at could be up to 40-50% in new build city flats.

The BoE predicted a 16% correction. The banks and pension funds have already priced this risk in. The banks have already withdrawn their higher LTV mortgage products and pension funds have suspended their property funds (commercial and residential).

www.bloomberg.com/news/articles/2020-09-13/british-banks-brace-for-deeper-slump-by-pulling-mortgage-deals

However the global economic situation going forward may prove to be more like the 1920's depression. Brexit will be a drop in the ocean if that does prove to be the case. An economic bounce-back maybe unlikely in a time frame such as 2008 onward so don't expect the property asset gains of the last couple of decades.

The following report from Deutsche Bank research team is unsettling to say the least.

www.dbresearch.com/servlet/reweb2.ReWEB?rwnode=RPS_EN-PROD$HIDDEN_GLOBAL_SEARCH&rwsite=RPS_EN-PROD&rwobj=ReDisplay.Start.class&document=PROD0000000000511857[/quote]
Your Bloomberg article is way out of date, most lenders have now returned to higher LTV values now.

OP: no one has a crystal ball. The fundamentals of the market remain constant though: Cheap money, the Bank of England printing more money, supply and demand. It would not surprise me if prices ticked up or remained flat this year.

[user1471538283]

I think prices will fall. We are renting and waiting to buy. I also think there will be many properties as there are loads since christmas here

[GETTINGLIKEMYMOTHER]

The truth is, nobody really knows. Not even the many self-proclaimed experts.
In the long term, history shows that prices will always rise, though there may be blips along the way. So unless you are only planning to stay for 2 or 3 years, OP, I’d go ahead.

As for new builds, they are almost invariably overpriced, often by quite a lot, compared to older properties of the same square footage and in the same area. And in the case of NB flats, you will almost certainly have hefty ground rent and maintenance charges to pay, as well as mortgage, council tax and everything else.

[rabbitcarrot]

As long as the government keep intervening the house market, extend stamp duty holiday, extend furlough to avoid the high unemployed rate, extend mortgage holiday, extend evacuation ban, prevent bank to reprocess defaulted property, keep interest historically low..etc..The market will still be hot & crazy...
Only the government stop doing above, the true impact on housing market will show up. I guess that would be depends on when this virus has been under control. People are back to some sort of normality.

[lockdownguru]

And I wouldn’t rely much on a research done by an almost bankrupt bank, Deutsche. If they had a crystal ball their share wouldn’t be worth £8.

[JohnMiddleNameRedactedSwanson]

Your Bloomberg article is way out of date, most lenders have now returned to higher LTV values now.

In fairness to @Lightscribe it was pretty contemporary when she made that post - in September of last year...

[Viviennemary]

I think the stamp duty holiday will bd extended. I'd be really surprised if it wasn't. Nothing coming on the market hardly. I expect people are waiting to see what happens next.

[Pipandmum]

Property price predictions are notoriously wrong. The so called experts seemed totally shocked by the buoyant property market at the end of sumner/early fall, when anyone with any common sense could see it coming.
Will there be another rush late spring as people who can't buy now due to lockdown (I know agents are still open and you can still move, but many people will not do that during a lockdown unless already in the process to beat the stamp duty deadline). Will there be a downturn due to people losing their jobs?
People will always need to move for one reason or another. The high prices people were willing to pay recently may not continue, but I think the market will be flat, rather than decrease. If the vaccine rollout is successful and restrictions are lifted to a large extent by late spring, there will be a demand as confidence increases.

[Smallgoon]

@BeijingBikini

Mortgage offers are being withdrawn and rates being offered are terrible

Really? We got a 1.9% offer on 15% and can now get 1.63% on 20%, or 1.5% on 25%. I think that's the best the rates have ever been.

Also, it won't just be retail and hospitality staff losing jobs, what a stupid comment. What about the head offices of all these companies? My employer has just laid off hundreds from head office. Lots of professional jobs are going down the toilet rn, as well as small business owners.

Those rates are good. I got 1.74% on 40% and that was pre-covid!

[Loofah01]

If you're in a good position to proceed then I'd just get on with it. Questioning the house market is the road to madness lol

[GETTINGLIKEMYMOTHER]

It’s not just the 3 Ds, Death, Debt, Divorce - there are also Decrepitude and Dementia (house needs to be sold for care home fees.)
We’ve had 2 of these in this family alone.

[LadyfromtheBelleEpoque]

What are people’s thoughts now? Stamp duty concession due to finish in March/April 2021 and Sunak has not indicated that he will extend it.

[Doomsdayiscoming]

He’ll remove it completely, forever.

The Tories would never allow house prices to drop significantly.

[LadyfromtheBelleEpoque]

@Doomsdayiscoming

The Tories would never allow house prices to drop significantly.

I think they will come up with something - I agree that with Brexit now they won’t allow house prices to go down too much as they need people to spend at home post lockdown.

[Avaganda]

I think it depends on the area. I'm in the SW and prices are going through the roof! Covid has made a lot of people realise they want space. I can't imagine prices going down here anytime soon.

[donewithitalltodayandxmas]

In sw as well and pricing us out as we don't have wages, average house has gone up £20-30000 in lots of places as people move out from larger cities to our small towns and cities