Property pundits - where do you think the market is going next?

[slackrunner]

Our house has just gone under offer (hurrah) - I was having a quick peek on Rightmove today and have noticed that others locally have also sold in the past couple of weeks.

Have we reached the bottom of the market, or is this just a spring blip and it has further to fall?

DH's solicitors firm have noticed quite an increase in conveyancing work this month. Things do seem to be moving at present, although prices are not as high as before, although not as bad as has been talked about on the news, etc.

Melon, feel free to provide any evidence you like of this or are you just spouting hot air and running ?

And being unpleasant = not saying house prices only ever go up does it

Further drop - quantitative easing and the fact that a few lenders have loosened their criteria a little have temporarily upped number of houses bought. However, this can't possibly outweigh the effect of rising umemployment which will obviously force prices down by its effect on demand.

Prices are slowly falling in my area. Not surprisingly, the houses that are selling are those priced at a level approx. 10% below 2007 peak if not more. The houses that refuse to reduce have just sat on the market for the past 18 months with little or no viewers (according to EAs). It is also noticeable that if one type of house (ie, 4 bedroomed detached house) prices at a 'lower' level, then slowly similiar properties coming onto market are doing the same.

Fall further in areas hit by unemployment and stagnate/fall less in other areas. For instance, Oxford seems to resist dropping as much as London and other cities. Some houses are selling fast as there are still investors about. Unfortunately we want to buy there. We went to visit Cambridge today, where there far less rented properties and the market has fallen (but less houses for sale).

Where i live v desirable beacuse of schools.When the first bit of good weather arrived plus the QE and low rates that weekend 9 of 11 houses went under offer.\within 2 or 3 weeks all back for sale

Well, between the recession and swine flu, it's all going to go to hell in a handbasket.

Face it: when you treat a commodity as an investment vehicle, then you have to be prepared to accept that the value of that vehicle can go up or down, as with any investment.

cant believe i didnt get a rise out of the stoke on trent comment. must be a sunday night blip. for once as well i will defend sorrento, she is allowed to express an opinion, however much it may be disliked.

Heck, Swine flu too - I forgot and that. Well then, we're all Dooooomed

sorrento has a point, it is all hot air, with agents talking up how many houses have sold, but really they are mostly under offer right now, and until offers convert into sales and there is hard evidence for what % of asking price was paid, we mere mortals aint got a clue whats going on!!!

xxx

Well something is happening, i have seen a REMOVAL VAN, a sight not seen round my way for a while

a REMOVAL VAN???? unbelievable!!
a rare sight indeed

xxx

The British Bankers Association figures out this mornng for mortgage lending showed a sudden surprise 6.8% downward lurch in the amount of mortgage lending for house purchases in March.

That breaks the slight upward trend of the last 4 months which showed mortgage lending starting to recover. My view was that the uptick just before New Year was an anomally caused by a small amount of pent up demand (e.g people having to move for schools, pay inheritance tax bills on death of relatives, retirement, divorce, etc).

Hometrack also said this morning that house prices have fallen 0.3% in April. My conclusion is that the market seems to be now settling back to a low activity falling price scenario with few people able or willing to cut the price of the house they are trying to sell and buyers unable or unwilling to raise their offers on the houses they are trying to buy.

Job losses are mounting and businesses are not being lent money and are shutting down. The new 50% tax rates and changes to tax allowances on holiday properties are going to hit the London and the second home market very hard.

We are not out of the woods yet and house prices are still overpriced compared to the historic ratio between house prices and wages. This the real dampener. What if wages actually start falling - as has been predicted this morning by the British Chambers of Commerce? Deflation in wages will inevitably feed through to deflation in house prices because banks are now only lending on strict multiples of salary again.

My conclusion is that to sell a house today requires a cut of 25% off the peak asking price and there is another 15% fall over the next 12 months running up to the election and then a sort of doldrums directionless market for several years - but only assuming wages do not fall too much. If wages fall a lot and there is mass unemployemnt then UK house pries could easily fall 50% from peak.

Thanks aBetaDad...You've summed up my thoughts beautifully. Now I can get on with cooking the lunch

You also found the phrase I was looking for in my earlier post (nappy brain had set in) which was the 'historic ratio' between house prices and wages. Back in 92 I was on a low(ish) wage yet could still afford a flat in Chiswick, even with 10% interest mortgage repayments! I noticed that same job was in the Guardian Media recruitment about 5 mnths ago....at almost TEN thousand less than I was on back then. A job with 5+ yrs experience Wages will be key to where house prices go as fewer people will be able to amass savings for big deposits.

I think the market has further to fall. There are more job losses to come and most people I know who are being made redundant are still working their notice. I think there will be a lot more forced sales later on this year (hopfully my house won't be one of them as I am being made redundant ).

I think this is a spring bounce.

My longer term prediction for the housing market is that it will recover, but not at the crazy rates we have seen in the past 10 years or so.

I don't think the culture that owning your own home is desirable will change, especially with tenant's rights being so bad. There is also still a shortage of homes.

I think one people have got used to the fact that you have to have a decent deposit and have had time to save up then the market will start moving properly again. I also think that earnings inflation will need to catch up a bit with house prices.

dh saw an agent's prediction this morning that there will be a further 18% drop by the end of the year.

ABetaDad, agreed - and we just accepted an offer (which hopefully is as solid as it looks/sounds...) at about 22% less than peak. Most desirable houses in this desirable area are not priced realistically, and are not selling.

but techinically, you dont know what the peak of a property's value is, unless it was pretty much bought/sold every year. All you know is the highest price it sold for.

I think most people do have an idea what a property's peak value is unless they are living in a unique house with no other properties nearby that can be judged as comparables .

Technically, true, but generally....we live in a street where all houses are almost exactly the same, and its pretty easy to guess from what others went for (minus a bit here for being less 'presentable', plus a bit there for being on the South side of the street, etc). Ballpark, of course, but still.

We were about to exchange in November, so do know specifically and certainly that we've accepted 10% less than then

Down further
I'm saying it will bottom out at 2000 prices
(that's in my very chi chi area of SW London where we can't afford to buy!)

Peak house prices were in August 2007 if you look at Halifax/Nationwide indices.

Elibean - 10% off since November 2008 is about right.

It varies though, i'd say around 2006 was the peak here then things started to tail off.

2000 prices! I'm kind of hoping you're right 1dilemma because then I could afford to buy house of my dreams (in my chi chi area of SW London ). Is this based on anything other than wishful thinking?

2000 prices!!!

In theory that shouldn't bother us as every time we have moved up the ladder we have used the "profits" as a deposit, but it would be pretty depressing.

We last bought and sold in 2004 and at that point I felt that house prices had inflated far too much (bought at £90k in 2000 sold for £205k in 2004!!!!) and there would have to be a correction, so I could definitely see prices falling to well below 2004 levels so further than the experts are predicting.

Yes, ABetaDad, my dh thinks so too...good to hear it again, though.

If we rent, in our chi chi area of SW London, and prices drop to 2000 levels, we could do rather nicely...OTOH, there might be no houses to buy at any prices at all, because people might opt to sit tight