Been a lurker here for years so hello to everyone & thanks for all the entertainment & time wasting opportunities you have given me. In return here's a post..
From watching the property market for about the last 10 years the only things I have seen effect prices are IR & sentiment. Can't really comment on what IRs are going to do but something clicked recently in my head on the subject of sentiment. Which I think may go some way to explaining what’s going on at the moment.
Just been reading a post on the C4 forum about the rightmove figures for this month it said something like "this is the only year in the past 2 where it is widely believed that a crash will not occur". What has become obvious to me is, we, on this forum, don't share the same sentiment about property as 90% of the rest of the country. This is highlighted by the regular arguments with family & friends about house prices dropping etc.. If as the article says over the last 2 years there has been a fear about a HPC & this has now largely gone away for the general public, or for some of them at least, then this represents a fairly major shift in sentiment towards the positive. Although I would think most people still have nagging doubts in the backs of their minds about a crash.
I have been trying to explain away the recent upturn to myself & this is the only reason I can come up with. That because houses haven't crashed over the last 2 years then they wont crash this year so buy now suckers before it's too late... Hence it's boom time again..
As has been said on this forum many times a HPC takes years to come about, it's not a 50% drop in one month thing but that seems to be the perception of most people (including me until I started coming here.) Last years monthly price drops won’t be seen as anything to worry about by the majority of people.
So a few people who can afford it (there can't be many of them left) will get sucked in & buy at the wrong/worst time & come the spring/summer we will be back to stagnation. Except this time without all the people who couldn't make their minds up whether there was going to be a crash or not. Leading to a much worse period of stagnation/falls than last year.....and so on and so so....