House Prices: When Down Is Up

I'm a first time buyer so for me, the more house prices come down the better. But I'm also worried about missing the boat - I don't want to wait and wait and then find that suddenly everyone is snapping up the cheap houses all of a sudden and the prices start rising again. Anyway have some inkling as to when I should start looking? Or is that the million dollar question? I think I'd have trouble getting a mortgage at the moment so next year would be best for me. Thanks

for the increasing population. The cost of building new houses is going up and will go up due to increasing oil/energy costs, increasing cost of materials, increasing wages of tradesmen/builders, the regulation of soundproofing and insulation and other very exacting regulations on all aspects of building houses. The only way builders will build new houses is if they can get a return on all that cost. House Prices should go up and will go up in price in line with the increased cost of living and the increased cost of manufacture. Is it not time for the media and the government to accept that house prices will not be a give away price and there will be more homeless people without property being returned to a profitable business for buy to let investors. It is time for the banks to realise it is not the UK property market that is the problem but it is Europe and the USA that have bad houses for investment. Houses in the UK are built to more exacting regulations than anywhere else in the World. The UK property market is unique and a good investment and I am tired of people talking it down. Why do people talk the british property market down?

up and each of us have a new partner, would we be better to rent the house out for now then re-sell when the house prices go back up again??? what is the up and down side of us doing this???

The prices of houses in the UK have been overpriced for Years and Years..The sh1t has hit the fan and the only way to get the housing market moving again is for people to realise that there 2 up 2 down is not worth a king ransom.
Back in 1977 my mum and dad bought a 2 up 2 down House for £4500.. The same houses are up for sale today for £120000 ...(And people wonder why there homes are not selling) That is an increase of 26.7 fold..MONEY HAS NOT DEVALUED 26.7 TIMES IN 34 YEARS

The tories announced new plans to reduce tax etc for 1st time buyers to be able to buy houses, when really measures should be being taken to bring down the prices of the bigger houses. Without 1st time buyers there is not a market and the measures are just to protect the "fat cats" in their big houses.
Their plans sound very good and vote winners but I think they're being very crafty.

Taking the UK as a whole, the price of an average 3 bedroom property is still being promoted at an average of £160,000.

This is less than ten percent down from the pre-crash high in 2007.

But the hidden, unreported reality is that these current average prices are totally unsustainable in our present economy. Unemployment is rising, wages and salaries are frozen or being cut, while inflation is running at a minimum of 5%. This means real take-home pay is falling and falling.

More and more homeowners are struggling with personal and mortgage debt and their home values, as they're currently perceived, are completely unrealistic.

For those of us who know what's really going on, we're expecting this current average property price of £160,000, will drop 40% to a floor of £96,000 before a sustainable recovery can begin to emerge.

The same is true of commercial property assets that are still grossly over-valued.

At the moment, banks are falling over themselves to try and keep homeowners in their homes and at least paying something, otherwise foreclosure rates would be sixty times higher than they presently are.

Our best guesstimate is that nearly 70 percent of all mortgage payers in this country are sitting on negative equity. We've avoided a depression but until the market catches up with reality and selling prices start reflecting where the UK economy really is, there won't be a recovery in house prices until 2025 at the earliest.

When there is a Boom in the economy inflation and house prices go down. And when there is a recession, inflation and house prices go up. IS THIS CORRECT??

http://news.bbc.co.uk/1/hi/business/6172088.stm
House prices 'set for slowdown'

UK property wealth has tripled in the past 10 years
The UK's rampant house price inflation is likely to slow down dramatically in the next year or two, according to a former government economic adviser.
The prediction comes from David Miles, the Morgan Stanley chief UK economist.

House prices have risen more than twice as fast as general inflation in the past 10 years.

But Mr Miles, a former government adviser on the mortgage market, says house prices will soon slow down so much they lag behind general inflation.

We are likely to have significant falls in real house prices once those expectations come down, but... the timing is very hard to fathom

David Miles, Morgan Stanley


Housing market: facts
Why are house prices high?
First-time buyer woes

However, Mr Miles cautions that predicting exactly when prices may fall is extremely difficult.

"A substantial fall in real house prices is likely at some point in the relatively near future, though it could yet be one or two years away," he warned.

Three years ago, Mr Miles wrote a review of the UK mortgage market for Chancellor Gordon Brown.

Coming bust?

This latest report, entitled UK Housing: How did we get here, is the latest prediction that the current house price boom will come to an end some time soon.


Earlier this month, accountancy firm PricewaterhouseCoopers predicted there was a one-in-three chance of UK house prices falling by 2010.

And last week, the Financial Services Authority (FSA) warned banks to make sure they could survive if house prices fell by as much as 40%.

This year, however, prices have started to accelerate again and are now running about 8% higher than a year ago.

Recent figures from the Land Registry revealed that the average property in England & Wales now costs more than £200,000.

Speculative expectations

In absolute terms, UK house prices have almost tripled in the past decade, but compared with the rise in prices generally, "real" house prices have roughly doubled - up by 112%.

Mr Miles says the single biggest factor driving up house prices in the past decade has been the expectation of buyers that prices will keep on rising.

As well as speculative expectations, the main factors pinpointed by Mr Miles are the rise in people's incomes, the rapid growth of the population and the cheap cost of borrowing due to low interest rates.

Of these, he says the expectation that prices will keep on rising by about 10% every year has accounted for between one-third and half of the excessive rise in prices seen in the past 10 years.

"We are likely to have significant falls in real house prices once those expectations come down," he warns.

"But our simulations suggest the timing is very hard to fathom."