House prices fell by 3 per cent – or nearly £7,000 – during the last month, according to Rightmove – Britain’s biggest online estate agent, which forecasts they will fall by more next year.
Rightmove claims to advertise 90 per cent of the properties on the market and says that national average asking prices have now fallen in five of the last six months. It predicts worse to come next year as the housing market is hit by fears of rising unemployment, increased forced sales, interest rate increases and lenders’ reluctance to advance mortgages
This is a bleaker prediction than the industry consensus – although some predict house prices will fall by 10 per cent next year – and follows last week’s report by Halifax, Britain’s biggest mortgage lender, of the first annual fall since November, 2009. It said house prices fell 0.1pc last month, meaning prices in the three months to November fell 0.7pc compared with a year ago. That compared with gains of 1.8pc on the month and a three-month annual rise of 1.2pc in October.
However, Rightmove reckons there will be winners as well as losers. 2011 will be a good year for buy to let landlords, buyers with substantial deposits and homeowners with good job security who wish to trade up the property ladder. Losers will include forced sellers, tenants and would-be first time buyers who cannot save up substantial deposits. (AtW's comment: signed new renting contract in a new place for 12 months...)
Miles Shipside, a director of Rightmove, said: “We forecast that new sellers will have to drop their asking prices further during 2011, the extent to which hinges upon whether base rates rise and or forced sale numbers increase substantially. At best prices will be flat, but a drop by as much as 5 per cent is predicted if sorely stretched lender forbearance buckles as prices fall and repossession numbers jump as a consequence.
“Price falls on a national average basis of up to 5 per cent are relatively minor – indeed, national average asking prices are 6.5 per cent lower this month than they were in June. However, in areas of over-supply and where forced sales are more prevalent, a more extreme re-adjustment of sellers’ price expectations will be necessary. These are likely to be more concentrated in the north of the country.
“Repossession numbers are expected to be under 40,000 this year, well below original estimates of 53,000. The forbearance that has been so far shown to some of the 175,000 who currently have arrears of 2.5 per cent or more of their outstanding balance will be under increasing pressure if these balances, and the number themselves, continue to grow. In the climate of more stable property prices that we enjoyed until recently, lenders took a more benign view.
“Recent price falls and some nervousness about prices in 2011, combined with growing arrears, could lead to lenders deciding it is in their best interests, and those of debtors, to go down the repossession route. If base rates increase then repossession numbers could form a much larger percentage of total sales, and at an extreme this could lead to even greater price falls than we are forecasting.”
Source: House prices fall faster as estate agent predicts worse to come – Telegraph Blogs
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The end is nigh now...
Rightmove claims to advertise 90 per cent of the properties on the market and says that national average asking prices have now fallen in five of the last six months. It predicts worse to come next year as the housing market is hit by fears of rising unemployment, increased forced sales, interest rate increases and lenders’ reluctance to advance mortgages
This is a bleaker prediction than the industry consensus – although some predict house prices will fall by 10 per cent next year – and follows last week’s report by Halifax, Britain’s biggest mortgage lender, of the first annual fall since November, 2009. It said house prices fell 0.1pc last month, meaning prices in the three months to November fell 0.7pc compared with a year ago. That compared with gains of 1.8pc on the month and a three-month annual rise of 1.2pc in October.
However, Rightmove reckons there will be winners as well as losers. 2011 will be a good year for buy to let landlords, buyers with substantial deposits and homeowners with good job security who wish to trade up the property ladder. Losers will include forced sellers, tenants and would-be first time buyers who cannot save up substantial deposits. (AtW's comment: signed new renting contract in a new place for 12 months...)
Miles Shipside, a director of Rightmove, said: “We forecast that new sellers will have to drop their asking prices further during 2011, the extent to which hinges upon whether base rates rise and or forced sale numbers increase substantially. At best prices will be flat, but a drop by as much as 5 per cent is predicted if sorely stretched lender forbearance buckles as prices fall and repossession numbers jump as a consequence.
“Price falls on a national average basis of up to 5 per cent are relatively minor – indeed, national average asking prices are 6.5 per cent lower this month than they were in June. However, in areas of over-supply and where forced sales are more prevalent, a more extreme re-adjustment of sellers’ price expectations will be necessary. These are likely to be more concentrated in the north of the country.
“Repossession numbers are expected to be under 40,000 this year, well below original estimates of 53,000. The forbearance that has been so far shown to some of the 175,000 who currently have arrears of 2.5 per cent or more of their outstanding balance will be under increasing pressure if these balances, and the number themselves, continue to grow. In the climate of more stable property prices that we enjoyed until recently, lenders took a more benign view.
“Recent price falls and some nervousness about prices in 2011, combined with growing arrears, could lead to lenders deciding it is in their best interests, and those of debtors, to go down the repossession route. If base rates increase then repossession numbers could form a much larger percentage of total sales, and at an extreme this could lead to even greater price falls than we are forecasting.”
Source: House prices fall faster as estate agent predicts worse to come – Telegraph Blogs
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The end is nigh now...
