UK house prices post biggest fall since October 2008 - Halifax data today Weds 7th Dec

[jimmyjammy001]

Just a quick note for anyone looking to buy, in particular first time buyers who run the extreme risk of running into negative equity if buying with a low deposit

UK house prices post biggest fall since October 2008

Also its important to note that "Property prices are up more than £12,000 compared to this time last year, and well above pre-pandemic levels (+£46,403 vs March 2020). "

I suspect there will be bigger falls yet still to come as well

Don’t you think house prices will be higher in 10 years than they are today? What about 20 years or 50?

I have no idea. House prices in 1998 weren't significantly higher than in 1988 - prices stayed roughly flat for about a decade. With climate change ramping up, I think the economic environment of the future is likely to be very different to the economic environment of the past.

Where I lived in the South East I made a big profit on property in that time.
But even if I didn’t, what about over an even longer timescale than 10 years? You know people in the past paid a few thousand for houses in desirable areas? Like houses in London for 20k. I’m so happy my parent’s & grandparents chose to buy, aren’t you? Or maybe yours didn’t so you’re bitter 🤷🏼‍♀️

Why do you think I'm bitter? I have a house which I can afford the mortgage on. I plan to stay here ages, so won't be affected by short term swings.

I'm just pointing out that nobody knows the future.

The fact is that climate change is likely to alter the world's economy in a big way. Anyone who pretends to make economic predictions that go 50 years into the future is full of bullshit, in my view. Maybe house will go up value, maybe they won't. My mortgage will be long paid off by then so I won't care. 🤷‍♀️

What @AreOttersJustWetCats

Obviously, no one knows for certain. We can only make educated estimates based on current data. Projections for 50 years would be largely guess work though as so many currently unpredictable things could have happened.

My impression is that there is no underlying basis for house price growth in excess of inflation (so headline prices may go up but not inflation adjusted ones). The UK has a huge trade deficit and most of the infrastructure has already been sold off. We are also at a critical juncture with regards natural resources, energy being the most obvious. The asset price inflation since the GFC has been caused directly by QE and ZIRP which can't happen, at least not to the same extent, now and in the relatively near future.

Do you think that the underlying economic conditions are relevant in terms of asset prices or anything else?

Why do you need to make inflammatory statements to other posters?
It is possible to have a different view without being bitter or jealous.

I think that anyone who doesn't think house prices will be higher in 50 years than today is full of bullshit tbh

I find it a bit odd to be accused of being bitter just because I admit that I don't know what will happen to house prices in future. 😂 And the PP is right - in the absence of QE and crazily low interest rates, there is nothing really to support property values rising above inflation.

We're talking about rises in real terms, above inflation. That won't happen by magic - something has to drive it. For the last decade it's been QE, but that is unlikely to continue.

Maybe they will go up in real terms, maybe they won't. The only person pretending to certainty here is you.

I think that anyone who doesn't think house prices will be higher in 50 years than today is full of bullshit tbh

in real terms? who knows

Earlier today you said "Not really" in response to my comment that house prices will rise again eventually due to inflation.

Now you're saying no one knows for certain and moving the goalposts by talking about price rises in excess of inflation.

A rise is only a genuine rise if it exceeds inflation though - surely that goes without saying?

Some on this thread seem doutful that prices will rise even with inflation going by @rainingsnoring response of "not really" to me saying they would rise eventually due to inflation.

@AreOttersJustWetCats but if you borrow to buy the mortgage debt goes down with inflation. So even if prices don’t increase in real terms the debt on it will

decreaSe in real terms

Yes, absolutely, but I don't think that's what we're discussing.

I have no real skin in the game given that I have no plans to sell my house at any point in the short or medium term. My house is my long term home, so as long as I can afford the mortgage (which I can), it won't materially affect me.

The likelihood is that house prices will rise in line with wages over the long term, regardless of inflation. Historically this is about 2.5% pa.
BUT we may be in a house price bubble, the chances are prices are above the long term trend. If a 20-30% correction is coming, who knows, then that’s a lot of years of catch up to bring them back to todays value.

You've obviously misunderstood. I was disagreeing with your comment about trained monkeys and disagreeing that this was a 100% certainty but was obviously talking in REAL terms. We might, for example, have hyperinflation when all house are listed for 100 million but that might not be a rise in real terms.
I'm not changing the goal posts by stating the obvious that no one can predict house prices in 50 years time with any degree of certainty.
Personally, I think the UK economy is in serious trouble and that we are heading for (partially in) a world recession. I expect one of the effects to be a fall in house prices.
You seem very wedded to the idea of real house price growth in perpetuity.

Has any recent expert predicted a correction as high as 30%?

The general consensus seems to be more around the 10% mark

www.idealhome.co.uk/house-manual/house-price-predictions-for-the-next-five-years

Nationwide / Bloomberg classed as experts?
www.bloomberg.com/news/articles/2022-11-03/nationwide-cfo-says-uk-house-prices-could-fall-30-in-worst-case?leadSource=uverify%20wall

30% was around my estimation based on rates at around 5%.

This would be on average, up north where houses have been historically cheaper and increased at a lesser rate will be less effected.

Greater London and the South much more so. So say 20% north and 40% south, so 30% on average.

Sentiment is key. We’re not at that point yet, but next year we will be. 18-24 months will be the estimation from peak to trough.

Private mortgaged BTL is pretty much finished and the likes of big pension/financial institutions will move into their place.

I can’t read this as it’s behind a paywall but from the first few words I have read “worst case scenario”.
Worst case scenarios were what terrified us so much during the Covid crisis and led to the extended lockdown & other panicking which had such dire consequences for the economy . I prefer to look at what the experts are saying is the likely correction not the worst case scenario. These tend to be around the 10% mark, some higher some lower.

Found a reference to the Nationwide figure of 30% that you quoted @RollerCoaster2020 that isn't behind a paywall.

Chris Rhodes, chief financial officer at the Nationwide Building Society, gave an even more dire prediction to the Treasury Select Committee yesterday, saying UK house values could fall by up to 30% over the next 12 months. Although, he explained that was “worse case” scenario, and the building society’s central estimation was a fall of 8 to 10%.

www.housingtoday.co.uk/news/savills-predicts-uk-house-prices-will-drop-10-next-year/5120235.article