defusenik

I think you've just answered your own question there. If I knew that someone might buy my house for £100k, why would I sell it for £85k - unless I was desperate to get rid of it? I think now is the wrong time to buy anyway. You have to factor in the fact that in the North East, with a very public sector heavy workforce, the worst of the economic crash is yet to come. The cuts have been advertised, but most of the job cuts themselves have not been implemented yet. As well as the people losing their jobs, there will be business and people affected by the rise in unemployment as people have less money to spend. And people made redundant will have payouts which might keep them going for a few months, but after that the problems will start to bite. In general the region will be poorer in 9-12 months than it is now. Those public sector jobs will need to be replaced, and it's not obvious where those jobs will come from. The other big thing is interest rates. Inflation is currently 2% above the government target and I think interest rate rises over the next year are inevitable. This will make mortgages less affordable for mortgage holders and first time buyers alike. So on balance the most likely thing for house prices to do in the region is fall. Possibly, they might only stagnate at or around the same level. Region-wide rises in house prices I think are by far the least likely option when you consider the economic factors of less people with the money to buy, less affordable mortgages, and more people in dire straits needing (or being forced) to sell. If in the meantime you're saving a bigger deposit, even with a rise in interest rates, you will be in a better buying position in say 12 months than you are now.