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House prices going up?

Are house prices expected to go up soon?

Asked on Mar 9 2011, House Prices in Hyde | Report content

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  • No, they are expected to go down, or at best stay flat during the next 2 - 3 years. Reasons: 1- Banks are still deleveraging i.e. unloading risky assets, this is expected to last a decade after the excesses of last lending spree, so there will be less credit and tighter lending criteria during many years to come. 2- Inflationary pressures are mounting and pressure on BoE is mounting to raise interest rates. Expectations are that base rate should hit 2% by end 2012. Many people reluctant to sell now will be forced to do so if interest rates go up 1 or 2%. Reason: someone who is now paying 5 % on a BTL loan on a property with a rental yield of 6% will be faced with negative cashflow if mortgage rates hit more than 6%. I.e. in other words, rent minus interest will be negative and many landlords will have to cover shortfalls every single month. 3-Because of UK inflationary environment and higher interest rates, the pound should rise, making UK property unatractive to foreign buyers. 4- Effects of enourmous public spending cuts haven't been felt yet. This will be a major drag in the economy. Conclusion, do not buy unless it is purely for lifestyle reasons. From an investment perspective, wait 3-5 years at least.

    Answered on Mar 9 2011, Report content
  • Million Dollar question! and only when prices have been reported to have gone up do you know they have for sure! I hate to ask why? but often knowing the reason for such a question can help with an alternative answer! Especially whenprices going up or down are usually an opinion when doing a forecast! Are you thinking of Buying a property?

    Answered on Mar 9 2011, Report content
  • I wouldn't hold your breath. Whilst in some areas there is a greater demand for property and prices stay relatively stable, in most parts, prices will probably remain the same or if anything, fall further. The market falling further can benefit those wanting to upsize, those wanting to downsize can feel the pinch.

    Answered on Mar 9 2011, Report content

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