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House Prices May Fall By Up To 25%

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House prices may fall by up to 25%

By Dan Atkinson and Alex Hawkes

16 April 2011

House prices are set to plunge by between 20 and 25% by the end of next year, a leading consultancy will warn tomorrow.

Clients of CheckRisk, the specialist investment strategy adviser, will be told that several trends will send property prices tumbling.

These include rising interest rates and inflation, worsening job prospects, the high levels of public and private debt and reduced mortgage lending.

'Effectively, British people have run out of money,' said Nick Bullman of CheckRisk.

The report's conclusions are far gloomier than official data would suggest, although these, too, have been depressed recently.

Earlier this month, the latest figures from the Department for Communities and Local Government showed a 0.7% rise in prices for the year to February and a 0.3% rise during the month itself.

In the three months to February, prices fell 0.3% compared with a 0.7% fall in the three months to November.

The figures are based on prices paid on completion of purchases.

CheckRisk will warn that commercial property prices are at risk of even greater falls.

The dire prediction of misery in the housing market comes after a leading investment bank said that London office rents, by contrast, were set to hit record levels.

Deutsche Bank said that rents in the West End could hit £130 per sq ft in the next two years. That would break previous records of £120 a sq ft and be a huge increase on the current £90 a sq ft.

There is a major squeeze on office space, given that there has been little investment in new buildings in the capital.

20% is probably about right I'd say. 10% this year and 10% next.

Edit: linky; http://www.thisismoney.co.uk/mortgages-and-homes/article.html?in_article_id=530706&in_page_id=8&position=moretopstories

Edited by Pent Up

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Up to?

25% is the minimum they'll fall imo. (Providing the sodding government butts out this time.)

High house prices are everything today, they must be kept high, artificially if need be (like now) its the key to everything. Time to really worry will be if they start dropping in great chunks nationwide, Government and Banks will be doing their very best to keep them from falling, expect more QE etc etc if they start tumbling.

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Deutsche Bank said that rents in the West End could hit £130 per sq ft in the next two years. That would break previous records of £120 a sq ft and be a huge increase on the current £90 a sq ft.

There is a major squeeze on office space, given that there has been little investment in new buildings in the capital.

unsure.gif

Every where you look in London a new tower is going up!

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let's face it, whoever they are they haven't got a clue anyway

Ireland's house prices have dropped 75%, what makes England so special. There is no recovery, just ultra low interest rates and more borrowing. We have longer because of size and lack of alternatives, but the whole thing is a joke.

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House prices are set to plunge by between 20 and 25%

When there are endless examples of 300% increases over a decade [97-2007] you could take 50% off and they would still be overpriced.

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When there are endless examples of 300% increases over a decade [97-2007] you could take 50% off and they would still be overpriced.

+1

That is exactly true. Sadly its also the reason why the government and the crooked banking sector cant afford to realise those losses.

I've numerous examples of house prices doubling between 2001 and 2003. DOUBLING in just 2 years! I've spent the best part of the last decade watching in astonishment as the gov did nothing to intervene. It was of course because they were lining their own pockets. Sadly I don't see this shower behaving any differently. Indeed they were at it too.

What a decade its been. I've lost all faith and respect for this country and those who live in it - present company excluded of course.

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CheckRisk will warn that commercial property prices are at risk of even greater falls.

The dire prediction of misery in the housing market comes after a leading investment bank said that London office rents, by contrast, were set to hit record levels.

Deutsche Bank said that rents in the West End could hit £130 per sq ft in the next two years. That would break previous records of £120 a sq ft and be a huge increase on the current £90 a sq ft.

There is a major squeeze on office space, given that there has been little investment in new buildings in the capital.

let's face it, whoever they are they haven't got a clue anyway

What would yields be if rents increased to £130 per sq ft?

Whoever they are are giving a reason for commercial property prices to increase. If rents increase then it becomes more financially attractive to buy. Commercial property yields are quite strong at the moment, occupancy is the problem but I haven't heard any anecdotal evidence that rents are falling.

Businesses seem content with the level of rents they are paying; the costs and disruption of relocating must outweigh the potential savings. Its a lack of incoming tenants not the level of prices. The large institutional landlords would rather an empty property than drop the rent and their pockets are deep enough to sit it out.

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+1

That is exactly true. Sadly its also the reason why the government and the crooked banking sector cant afford to realise those losses.

I've numerous examples of house prices doubling between 2001 and 2003. DOUBLING in just 2 years! I've spent the best part of the last decade watching in astonishment as the gov did nothing to intervene. It was of course because they were lining their own pockets. Sadly I don't see this shower behaving any differently. Indeed they were at it too.

What a decade its been. I've lost all faith and respect for this country and those who live in it - present company excluded of course.

Soooo true.....saw it myself, utter madness, 20% fall min will have to happen to get some sort of sense of reality and equilibrium back....no one blinked an eyelid, they were rubbing their hands together when we saw the manipulated artificial rises that were manufactured without any kind of control or restraint......last one on, first one off down the line depending on the amount of risk/debt taken on by those that are unable to service it... going forward it will not get better only worse. ;)

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Up to?

25% is the minimum they'll fall imo. (Providing the sodding government butts out this time.)

What moves can they make to prevent falls. QE is the only one left and that will cause the pound to sink in value pushing the cost of imports higher.

Edited by Blod

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What moves can they make to prevent falls. QE is the only one left and that will cause the pound to sink in value pushing the cost of imports higher.

....higher import costs with a weak pound will affect most of us....lower house prices will be good for most, apart from the highly indebted, the over stretched, the ones that have over borrowed money as an investment opportunity therefore have debt on more than one building, and certain others.....anyway the weaker the pound the higher chance interest rates will have to rise

...if general commodity prices rise causing the things we all have to have to live to go up, people will not be able to pay the rent.

A BUILDING MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. INVESTMENTS CAN GO DOWN AS WELL US UP. ;)

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....higher import costs with a weak pound will affect most of us....lower house prices will be good for most, apart from the highly indebted, the over stretched, the ones that have over borrowed money as an investment opportunity therefore have debt on more than one building, and certain others.....anyway the weaker the pound the higher chance interest rates will have to rise

...if general commodity prices rise causing the things we all have to have to live to go up, people will not be able to pay the rent.

A BUILDING MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. INVESTMENTS CAN GO DOWN AS WELL US UP. ;)

+1

To quote the Nulabour note left in the treasury, "sorry there's nothing left". There is nothing left to save things now.

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When there are endless examples of 300% increases over a decade [97-2007] you could take 50% off and they would still be overpriced.

EXACTLY!!!!!! 25% off is nothing! They need to halve, at least!

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let's face it, whoever they are they haven't got a clue anyway

Ireland's house prices have dropped 75%, what makes England so special. .....

I've just finished a hol in Cyprus, and there are huge billboards at the side of the road offering new holiday apartments at a 30% discounts over last years prices.

I was surprised when I was told that the biggest single revenue stream in Cyprus is flogging property of this nature - more so than straight forward tourism. Brits have been huge buyers over the lest decade here, so the line in the OP "Effectively, British people have run out of money,' said Nick Bullman of CheckRisk." will be very very painful for places like Cyprus, Spain or the Canaries as well as the UK.

Unless wealthy Germans swap overpriced BMWs for 70% discounted holiday flats in ever greater volumes of course :P. Mind you, when oil's $200 a barrel and the return airfare is £600 a head then distant holiday flats may be a poisoned chalice for most brits anyway.

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FFS. I've not bothered readaing much on here for a few months but now I know why. There simply hasn't been any obvious HPC in the south eastern city where I live. As it hasn't happened yet, there is a very high liklihood that there won't be. You can analyse the why not or why as much as you like, but without a massive unemployment hit PLUS an incease in rates of at least one percent this year, neither of which are likely at all, then what you would call "HPC" in such areas simply will not happen...not in any street where you would want to live, anyway.

I called it wrong, didn't have the balls to risk it on the stock market, didn't buy gold and sh1t out by staying "safe" in cash. Reckon my energies are better used working out how to live with that.

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FFS. I've not bothered readaing much on here for a few months but now I know why. There simply hasn't been any obvious HPC in the south eastern city where I live. As it hasn't happened yet, there is a very high liklihood that there won't be. You can analyse the why not or why as much as you like, but without a massive unemployment hit PLUS an incease in rates of at least one percent this year, neither of which are likely at all, then what you would call "HPC" in such areas simply will not happen...not in any street where you would want to live, anyway.

I called it wrong, didn't have the balls to risk it on the stock market, didn't buy gold and sh1t out by staying "safe" in cash. Reckon my energies are better used working out how to live with that.

Staying safe in cash has worked out perfectly for me so far and the big price falls are yet to come.

It's easy, with hindsight, to say what investment would have been best. If I had a time machine I'd probably do the horses.

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And another 10% the next year....... and possibly the next too.

A big percentage of people are overpaying their mortgages at present. (I have paid over 10% of mine off in one year).

There must be a tipping point where there is sufficient equity back in the system for the falls to "safely" start again without damaging the precious banks too much... yes, there will still be individual casualties (people still on interest only etc), but these are "collateral damage" that the government / banks can manage.

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FFS. I've not bothered readaing much on here for a few months but now I know why. There simply hasn't been any obvious HPC in the south eastern city where I live. As it hasn't happened yet, there is a very high liklihood that there won't be. You can analyse the why not or why as much as you like, but without a massive unemployment hit PLUS an incease in rates of at least one percent this year, neither of which are likely at all, then what you would call "HPC" in such areas simply will not happen...not in any street where you would want to live, anyway.

I called it wrong, didn't have the balls to risk it on the stock market, didn't buy gold and sh1t out by staying "safe" in cash. Reckon my energies are better used working out how to live with that.

Exactly how I feel, tbh.

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There are some terraced houses near me that have come on the market. And its tempting to buy and not pay rent, however the prices are quite ludicrous IMO. £59k for what are effectively "back to backs" which need work in a town where the largest employers are the "state" in the form of the council, the NHS, and the colleges.

They would really need to drop to £40k for me to be overly interested. Not surprisingly at these prices the BTL brigade are not falling over themselves to buy. I would assume that cash BTL would step in at some stage and provide some support to prices, though I'm getting the feeling that the amount of BTL in the town is approaching saturation point.

Lets face it New Liebour had pretty much developed the perfect ponzi scheme. Cheap foreign money, stupid greedy banks, and planning restrictions, immigration and social engineering in the form of mass property porn, to keep the bubble pumped.

Edited by Sir John Steed

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When there are endless examples of 300% increases over a decade [97-2007] you could take 50% off and they would still be overpriced.

House prices to fall 200% :blink:

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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