The experts in house price predictions give their views on the British housing market , for buyers It’s hard to know what to expect in these uncertain times in the housing market. Mortgage availability, mortgage cost, supply and demand issues… there are so many factors involved, it’s almost impossible to guess where house prices will be a year from now. Nonetheless, many people are giving it a go.
So it’s important to listen to the right people – the ones making informed guesses.
House prices – who’s saying what?
An excellent piece in The Times compared the views of five experts. It started by pointing out that (according to the Nationwide House Price Index) house prices are currently around 15% lower than they were a year ago – that the average house was worth £158,872 in November, down around £30,000 from the peak in October 2007.
Martin Ellis – chief economist, Halifax – predicts a further 8% fall, with prices starting to bottom out at the end of 2009.
“There’s a lot of uncertainty surrounding the economy and unemployment figures in particular at the moment, so it’s very hard to say when prices will start to recover. Prices certainly won’t bounce back quickly.”
Jonathan Davis – housepricecrash.co.uk – predicts a further 35% fall, with prices bottoming out in spring 2011.
“If you remember the last house price crash in 1988, it took until 1994 for the market to recover, so a good four or five years. There is no reason whatsoever to suppose the market will recover any quicker this time.”
Yolande Barnes – Savills – predicts a further 10% fall, with prices bottoming out during 2010.
“Whilst we expect prices to bottom out during 2010, the prospect of recession means we do not expect prices to start recovering anytime soon. Houses will not regain their 2007 value until about 2014, or possibly 2013 in the south-east.”
Nicholas Leeming – propertyfinder.com – predicts a further 10% fall, with the market starting to level out at the end of 2009.
“It will take a while for the effects of the Government bail-out to filter through – the capital markets will not be freed up until maybe the third quarter of 2009, when we can expect to see more mortgage transactions and a gradual recovery of the market.”
Nick Bate – UK economist, Merrill Lynch – predicts a further 10% fall, with a reminder that “no one can say with any confidence exactly where prices will be in a year’s time.”
“But it will certainly be a long time before prices recover to the levels we saw last year. With unemployment rising and people becoming less credit worthy, banks may continue to be reluctant to lend for some time, and this will lead to a very muted recovery.”
