Are UK house prices crashing? Is it just a blip?

Question

Or is it something more serious?

Someone at work told me we are going back to what house prices cost in the 1960s. :o

Answer 1

Well if it is, it's not happening where i live, houses are still around £1 million. No joke. Though in the less posh areas they are going down (no i'm not posh, i was forced to move from london lol)  

Answer 2

the same thing that happened here with the mortgage market is happening there now.  Prices won't go back to what it was in the 60s, but they may drop 30, 40% is some areas.

Answer 3

House prices are supposed to be falling, though there's not much sign of it here in prosperous southeast England. Prices are forecast to fall by up to 35% from their peak, but I doubt it will be so bad. My guess is 20-25%, less in the southeast.

As house prices bottom out, people with savings or good credit ratings will start to snap them up at bargain basement prices. And some first-time buyers will start to buy. This will push up prices, and a recovery will start.

There are 62 million people in the UK and they all need somewhere to live. The housing stock has been growing very slowly for years, and has slowed down further in the past months. So on a supply and demand basis, there's no way house prices will crash.

Answer 4

STAMP DUTY DITHERING MAKING IT WORSE GOOD OLD LABOURS ALISTAIR DARLING

Answer 5

House prices in the UK will remain high, it is a small island with good economic prosperity, more demand than supply of good places to live.

This is a correction of 10% to 25% which will take us back to around 2003 levels, be painful for some, but not change the long term trend.

Lots of good free house prices info for your area available on Zoopla by the way:

Answer 6

House value= price of bricks and mortar+amenity of area

When credit is readily available ..demand rises ..prices rise

The converse is true in the present 'credit crunch'..the fault of financial institutions buying/selling on bundled 'sub-prime' loans on the expectation of a profit even in the event of foreclosure.

It was insane 4 some institutions like N. Rock, Fannie Mae etc to grant loans of 125% of value of the property with the only security being the property itself (as mad as pyramid selling!)

The bubble was bound 2 burst!. Ur house is a financial asset..true.. but not a totally disposable one..u need it to live in! It is very risky for individuals too to raise capital on the basis of the future value of their property. I predict that house prices will return to a sensible equilibrium value based on my first statement.

Answer 7

The 1960's scenario is a gross exaggeration. But another 20-25% is quite possible. After all, we have had at least eight years of a developing asset bubble. Not only has credit dried up, but we have a recession coming on.

I don't buy the argument that houses will start to rocket after 2010. The BOE and Treasury will have to introduce banking controls to protect us from irresponsible lending/borrowing. The way it used to be.

Answer 8

Current market trends are that prices are falling back as a result of the credit crunch and the difficulty with obtaining new mortgages on the finance market. Prices are expected to drop by up to 20% within two years.

However, finance companies expect that when the credit crunch is overcome by sometime in 2010 the market will stabilise and you will see prices rocket by 30%.

This is because of the lack of building of new houses at the moment. Building firms have almost completely stopped new housing projects because they will not sell in the current climate. This will only strengthen the market in the long term as there will be more and more people looking to get on the housing ladder but there will be an ever increasing lack of property on the market.

Simple economics of supply and demand where there are more potential buyers than property available will inevitably push prices up way past what they are now when the market recovers and interest rates come down.

Answer 9

I'm in Edinburgh, house prices still rising round my way, rising slowly but still rising.