The information contained within the following news articles have been pre published. The articles were published on the dates indicated and the information contained within these issues include references to taxation, legislation, regulation and other issues or concerns that may no longer apply
Where next for house prices
After the initial mini-rally, the property market truly slumped in the second part of 2010 and is now looking increasingly dysfunctional.
Indeed, a report issued last week by a leading think tank suggests that house prices may never get back to their 2007 peak, when adjusted for inflation.
The National Institute of Economic and Social Research (NIESR) predicted that house prices would stagnate for at least five years, with the average property only returning to its 2007 peak of £817,600 by 2016. However, as the NIESR points out, by factoring in inflation, the real value of houses will fall by 10.5%, so on this basis, a property may never regain its 2007 high. If so, it would be the longest period of decline since records began in the 1960s. Moreover, the regulations that have been introduced since the crash would prevent that kind of peak re-occurring.
Here at Census, we take a pragmatic view of the fragile housing market. Flat economic growth, widespread public sector cuts and falling real wages mean that buyer demand is weak. Factor in an increasing supply of properties for sale, and it seems likely that house prices will continue to fall. The Land Registry reported that house prices dropped 1.1% in March compared to the previous month – the biggest fall in two years. London was the only region showing growth over the past year, rising 0.8%.
Our advice to first time buyers, especially those with small deposits, is to beware. Now is the time to take professional advice to make sure you gain a competitive deal. If in doubt about what to do, our mortgage team at Census today on 028 9066 8700.
Chartered Financial Planner