Musings of a group of London Property Buyers Agents

I know, I know, we’ve been banging on about house prices for over a week now, but you regular readers know how it is: some weeks EVERYONE releases their house price data, and for property anoraks like us (and some of you) frankly, we know you love it really!

The National Housing Federation has just published a piece of research by Oxford Economists stating that the average house price will fall by 12.2% this year and a further 4.6% next year before stabilising in 2011 with a 1.1% rise.  Apparently we are then into a boom cycle where prices will rise by 7.5% in 2012, 8.4% in 2013 and 6.8% in 2014. 

So that means wannabe first-time buyers who haven’t quite saved enough deposit can rejoyce, supposedly, and carry on drinking their deposit down the pub.

Unfortunately, we don’t know the thinking behind all these stats, apart from the fact that the researchers appear to have based their findings on lower income households and not taken into account the influx of foreign buyers who have contacted all of us London property pros over the last 12 months.

However, the gist of the report is that for unhappy new homeowners in the North West and the East Midlands, there is more bad news: prices in 2014 are forecast to be lower than 2007 so those who bought at the top of the market will have lost out unless they bought an absolute gem.

No such issues for London and the South East.  Property prices in the South East are forecast to rise by 10% from their peak in 2007 and prices in London are forecast to rise by 8%.  As always these are averages and take into account lots of areas in which our Clients would never want to live.  We are pretty confident you are safe, unless we told you so when we organised your house purchase.  We may have quibbled about your asking price but that is what you paid us for and none of our clients are in negative equity, or have lost money on their property purchases to date. 

We may live to regret it, but I think most of our Clients will see over 10% growth by 2014, wherever they are.

Technorati Tags: house price crash, house price inflation, House Prices, London House Prices, UK house prices

Tags: house price crash, house price inflation, House Prices, London House Prices, UK house prices

Musings of a London Property Finder

The Halifax issued data from it’s house price index yesterday including the news that housing affordability is at it’s most favourable for five years.  The house price to earnings ratio has fallen by 22% in recent months from a peak of 5.84 in July 2007 to an estimated 4.56% in November 2008 reaching a level not seen since the end of 2003.  Affordability is now only 0.56% above the long-term average of 4.0%. 

The most significant drop in the price to earnings ratio can be seen in Greater London where property is significantly more affordable than it was at the peak of the market in July 2007.  Property prices have fallen but wages generally remain static thus far. 

Martin Ellis, Chief Economist at the Halifax commented:

” There was a 2.6% decline in average UK house prices in November.  The combination of high house prices in relation to earnings, constraints on householders’ incomes and spending power and the decline in the availability of mortgage finance since the summer of 2007 has curbed housing demand.  These factors are major contributors to lower house prices and activity.”

House prices have tumbled 10-15% on average in the UK so housing affordability has also dropped.  Deflation and falling oil and food prices plus the lowering of interest rates will start to affect consumer finances.  So the only thing remaining to fix, is credit availability and confidence.  However, until banks start lending and first time buyers can buy at affordable rates with 90% mortgages again, as was possible during the last recession, it’s difficult to see when the slack housing market will start moving. 

Thank goodness for those with good credit ratings or no need for mortgages – they are keeping us London Property Finders and Relocation Agents busy these days.

http://www.hbosplc.com/economy/HousingResearch.asp

Technorati Tags: Credit availability, Halifax house price index, house price index, House price to earnings ratio, Housing affordability, London House Prices, London property affordability, London Property Finder, UK house prices

Tags: Credit availability, Halifax house price index, house price index, House price to earnings ratio, Housing affordability, London House Prices, London property affordability, London Property Finder, UK house prices