Why Britain's house price crash is far from finished

[TimberWolf]

Says the editor of a This Is Money, which he backs with a table of data sourced from the Economist who state things more conservatively:
House prices are creeping up again. That may not last

[Menelaus]

Says the editor of a This Is Money, which he backs with a table of data sourced from the Economist who state things more conservatively:
House prices are creeping up again. That may not last

I'm afraid so.

[DimPrawn]

What crash? According to Rightmove and many others they've been going up month after month for most of the year.

House price boom more like.

[Moscow Mule]

Lack of supply is keeping prices artificially high round our way.

It's a delicate balance between the currency collapsing and our savings being worth next to nothing and not paying over the odds for the house we want...

[Doggy Styles]

Indeed, further to fall. Instead of getting carried away with headlines, people should look at the fundamentals.

[Menelaus]

Whilst being a pain in the bum I've managed to avoid commentary on this recently and thus haven't put a figure on where I think the numbers are going on this.

Between now (Q3 09) and Q4 10 some of the geekery I'm into suggests that there's a further 7%-9% drop to come, followed by a prolonged period of stasis (prolonged = ~18-22months) where there's very little volatility.

[Moscow Mule]

Whilst being a pain in the bum I've managed to avoid commentary on this recently and thus haven't put a figure on where I think the numbers are going on this.

Between now (Q3 09) and Q4 10 some of the geekery I'm into suggests that there's a further 7%-9% drop to come, followed by a prolonged period of stasis (prolonged = ~18-22months) where there's very little volatility.

We're waiting until August next year before buying again. Unless we see a real bargain...

[alreadypacked]

Indeed, further to fall. Instead of getting carried away with headlines, people should look at the fundamentals.

Wharf news headline "Prices climbing higher" next page apartment for sale £104K the lowest price I have see for an apartment in Docklands in a long time.

Lots of people trying to talk the prices up, I think a lot of people are trying to get out at the highest price they can, before the next dip.

As DS says fundamentals just don't add up.

[DimPrawn]

From an estate agent

Over the summer holiday period the UK housing market was the source of surprisingly positive news on the economic front. The improvement in market activity has continued, and been far quicker than in previous recessions.

July and August saw a surge in enquiries from buyers, a trend which has continued into September, with new mortgage approvals on the increase and more sales being arranged. All this means there is, at last, genuine evidence of stabilisation in the housing market. Undeniably, the overall picture in London and the South East is now rosier than at any time since the third quarter of 2007, when the economic downturn started to bite.

One of the key factors driving recent increased activity and price rises has been shortage of supply and higher demand. This means that, although turnover in the market has been creeping up only very slightly, it has been enough to boost prices. In the recession of the 1990s, far more homeowners became distressed sellers and were forced to sell, as they couldn’t afford to meet their monthly mortgage repayments. Then, with more properties coming on to the market, prices continued to fall, and fell for a longer period. The difference then was that interest rates were about 14% and had only fallen to about 10.5%, when the country started to emerge from the downturn.

Today, interest rates are at the historically low level of 0.5%, and have been since March, making it much more manageable for people to meet their mortgage commitments, despite rising unemployment. Although the risk of rising interest rates seems to be limited at present, and The Bank of England is all too aware that tightening monetary policy too soon could threaten economic recovery.

For now, let us be thankful that the housing market has stabilised. For the rest of 2009, I predict the market in our region will continue to see better turnover, and those seeking to sell and buy in the same market will be able to do so with greater confidence.



Boomed!

[Moscow Mule]

<snip>

That might all be true. Then again, the art of a good estate agent is to cover up things you don't want to see and emphasize the positives