General (main property discussion here) - House Price Crash?

(amazingly imo) IMF (International Monetary Fund) warned today of future UK house price crash if interest rates are to rise.

Firstly, is this really their concern?

Also does this not put increased pressure on Brown / King to keep rates down?

Personally I think flat til the end of year for sure .....

I live in London and believe prices have already fallen over the summer (as much as 10% in some areas).

But I don't think property will fall in nominal terms much over medium. With increased inflationary pressure now that oil has hit $53 a barrel, prices will surely fall in real terms.

In any event, it will be interesting to see what happens. Ia m already looking to buy in a few select areas in London.

Prices in London have already taken a slight knock. But doesn't look like a crash is on its way.

FS

I agree that prices have softened 5-10% but thats almost healthy isnt it. Well has helped yields appear more attractive if you are buying.

If you believe that interest rates have levelled out and perhaps might fall, I don't think that there is any chance of the market slipping any further.

Jo

The trouble is it's all so localised. I think whatever the market you have to be on your guard and do your research above all. Less than a month ago the Blairs splashed out over £4m for their future London pad. If they had felt the economy would drag prices down considerably I can't believe they would have put quite so much of their personal wealth on the line.

What drags down prices most I think is forced sales, and this is most prominent when interest rates take off and cashflow dries up, rather than profit takers selling while they still can (as I see now). While interest rates plateaux, I can't see much of a dip beyond a correction for the speculative money leaving the market.

I think your point about the blairs is a special case. There's so much constant money in London that the really expensive places don 't dive like the "investment" 2-bed flats.

Also, agree forced sales bring down prices fastest, but interest rates may be some way off. However, the forcing might not only come from inability to pay mortgage - there's so much personal debt hanging round that isn't sustainable people might be STRing just to cash out.

Regards

Phil

i been looking at properties in nottingham. prices seem to have dropped 5-10% but a lot of this seems to be down to the fact that those that had completely unrealistic expectations have become a little more sensible. im pleased for myself and for the market. i think this needed to happen.

the real dip in prices seems to be with the new builds and off-plan. i nearly bought some of these a few months back. talk about oversupply in some areas. there are going to be some very unhappy people over the next 12 months who bought in this market.

jo

Despite my post from 3-4 wks ago, I think the London market has started to pick up once more. Not like before but the traditional buyers are definately back in the market.

This market really is difficult to call.

It is a coming......not sure when but mst happen

Thomas, I have started to think that things might not be as bad as I suspected. Indicators are changing all the time at the moment so I am not sure what to think.

January and February will be important months as typically the market is strong then. This is the critical time.

Phil

This subject is getting old. Phil's comments summed up my feelings and that is no-one really knows so lets not dwell on it and get working.

Owen

Owen,

It might be old but long may it continue. Forums are for debates and all markets need buyers and sellers.

After my post of 7th October. My thoughts are:

1. Market has stabilised - largely due to interest rate hiking but not beyond the somewhat critical level of 4.75% 2. Market has softened 5% in the South but seems to have held up strong in the North.

Julian

London still down but signs of a slight pick-up in activity. Interesting times ahead. Yields moving higher so not bad for investors.

FS

FS,

I have also noticed signs of a pick-up in London. I think that the market will see a small uplift in January. November / December are traditionally quiet months with limited activity in any case.

Julian

Goldman Sachs thinks prices will dip between 10 and 15% over the next 18 months, while Barclays think there will be a 20% sink next 3 years. This includes a 8% drop in 2005 alone!

Hold on tight everyone.

halifax reckon on a 2% drop in 2005, then a steady rise again.

in my opinion you can't make generalisations on UK property prices.

http://news.bbc.co.uk/1/hi/business/4064613.stm

I have also noticed signs of a pick-up in London. I think that the market will see a small uplift in January. November / December are traditionally quiet months with limited activity in any case.unquote

A house over the road from us has been sold subject to contract in 5 days. Needed some work to bring into the 21st century but less than 10 grand with a full set of windows.

November and December may be slow but it depends what you are selling.

Worst thing is the poor seller is going to be into over 2 grand in fees to the estate agent. They only did 4 viewings and 2 of those were me.

Gavin

I read in the news today that the BBC are to lay off 3000 staff. Someone in the Evening Standard reckons this will have an impact on the housing market in West London? I'd be surprised if that few could make a difference - how many of them can be owner-occupiers and live close to work??

John

Actually they are laying off staff at CSFB as well!

I'm not exactly a bear or a bull, but I am not sensing any great shift in sentiment among business or consumers - is this just a red herring do you guys think?

John

Gavin, £2k in London is not bad. 2.5% is what agents charge in my area of central london. They make a tidy profit.

Julian

I just sold a flat in London for £558 with an agent charging me 2.25% + VAT. That worked out at nearly £15k. I was not too happy but then again it is the going rate.

FS

Then you've got the stamp duty of course Francesco. I heard a rumour that this was going to be increased (the boundaries). Or was that the Tories manifesto?

Anyway, why do you guys think estate agents are paid a proportion of the house's value? Surely it's similar time and effort involved? Some of my sales happen quickly, some longer, but I wouldn't say the more expensive ones are harder to shift.

John

An agent does at least actively market your property (unless they want a big fat brown envelope from a developer friend..), printing costs, viewing time, all adds up I guess.

I still consider that they are NOT worth the cost, however.

The stereotypical agent dousing himself with half a bottle of cologne couldn't have been any nearer the mark last week. I was almost knocked off my feet by this one whipper-snapper, my eyes were practically burning in their sockets!

Along with Landlord Trader, there are other online estate agents that you can use. All keep the costs down.

I reckon we could do a better job than all the overpaid so called analysts, in my opinion the whole market is governed by interest rates which determines monthly affordability. As landlords there are two simple rules, 1. buy in a recession. 2. Sell during a boom. Period. Please please give us a recession !!

Too true Graeme. Too true.