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Average House Price To Hit £200,000 By 2015

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http://uk.finance.yahoo.com/news/Average-house-price-hit-200-yahoofinanceuk-4131775052.html

Average house price to hit £200,000 by 2015
One think tank reckons house prices will reach a new peak within four years.../
There are three factors behind this prediction. Let's take a look at them and see how realistic they are.
A shortage of housing
I remember my old economics tutor drilling three words into us over and over again: supply and demand..../
An increase in mortgage availability
The think tank reckons that there will be a gradual increase in the availability of mortgages...../
Loose monetary policy
The CEBR reckons that base rates won't head beyond 2% in the next four years, with mortgage rates not moving too much from current levels, and potentially even falling if there's another period of quantitative easing.

What do I think? Years of stagnation with occasional drops making buying a poor investment (investment) for many years to come. If you want out of the renting phase and get settled I would buy. But that is a BIG if..because renting is not that bad and if you stay away from East Sussex where rents are fueled by housing bennies it is probably better to rent than than tying your money up in deadweight for the foreseeable. If inflation was threatening, and I am more of a deflationist, buying now makes sense. The CEBR are probably just ramping what they have a VI in.

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I wonder if the CEBR are commisioned by the Express? Here are some of their past gems:

Prediction made in Aug 2009:

House prices will show modest increases next year as the property market bottoms out about 25% below the 2007 peak, a report by a leading group of economists claims.

The nosedive in property prices means that the market has almost hit its 'floor', according to economists from the Centre for Economics and Business Research (CEBR).

It says prices will rise 2% next year and 3.5% in 2011.

Fail. They fell in 2010 and have been flat this year.

Prediction made in Feb 2010:

House prices 'will leap 20% by 2013'

House prices will rise more than 6% during 2010 and be around 20% higher by the end of 2013, according to a leading economic forecaster.

Fail. One and a half years into their prediction, prices are lower than when they made it.

Prediction from May this year:

Cebr’s new forecast for house prices shows a 1.4% fall in 2011 but then a recovery that will generate a four year rise in prices of 16% between 2011 and 2015.

So they've actually dropped their [ahem-straight face] 'prediction' 2% in a few months. Are they chasing the markety down :lol:

Still I'm sure your average express reader, with the attention span of a potato, will forget their past predictions and lap it up.

Edit to add nice to see you posting again RB.

Edited by NEO72

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Assuming the average house price today is £165,000 then to reach £200,000 by 2015 they would need to rise at 5% year on year.

I am glad for the CEBR that they can be so confident of their predictions, but that rate of 5% massively out strips projected economic growth.

Where were the CEBR in the years before the crisis broke? Does anyone here remember them sounding out concerns about the prevalance of liar loans and the behaviour of the banks? I don't.

So on that basis, why should any thinking person give them any credibility?

It's wishful thinking at best.

Edited by nmarks

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For me it isn't so much a case of prices going up or down it is the fact that rental properties are in demand and rent has risen by about 20% in 3 years.

I am now looking at houses for £200k where I could put down a deposit of £50k (which I have) and get a mortgage for just under £500 per month. In my area to rent the same property I would be looking at at least £1200 pcm. If the current conditions continue there is only going to be more demand for rental property !!!! My problem is that I am fussy and refuse to live in a Barrett Box or an ordinary house, I like things a little less "normal", these properties are unfortunately the ones that are going on the same day.

I think this is the big shift for me that has happened since I STR'd in 2003, all of a sudden I am really noticing rents going crazy on half decent properties and letting agencies packed full of 30 something affluent couples all chasing those £1000 - £1500 properties that I was always looking for more or less with only a handful of others since last year. Add to everything that in the past 18 months I have been thrown out by 2 landlords who have decided to sell up I am starting to think that this situation is going to force a lot of people into either buying or BTL (which for the right properties now seems like a no brainer even if prices do crash 20%+).

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For the govt to meet it's economic projections does it need this wishful thinking.

Still if we advance mortgages to the unemployed I'm sure we can achieve this. Just need to change the housing benefit rules so it becomes a mortgage benefit as well.

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http://uk.finance.yahoo.com/news/Average-house-price-hit-200-yahoofinanceuk-4131775052.html

Average house price to hit £200,000 by 2015
One think tank reckons house prices will reach a new peak within four years.../
There are three factors behind this prediction. Let's take a look at them and see how realistic they are.
A shortage of housing
I remember my old economics tutor drilling three words into us over and over again: supply and demand..../
An increase in mortgage availability
The think tank reckons that there will be a gradual increase in the availability of mortgages...../
Loose monetary policy
The CEBR reckons that base rates won't head beyond 2% in the next four years, with mortgage rates not moving too much from current levels, and potentially even falling if there's another period of quantitative easing.

What do I think? Years of stagnation with occasional drops making buying a poor investment (investment) for many years to come. If you want out of the renting phase and get settled I would buy. But that is a BIG if..because renting is not that bad and if you stay away from East Sussex where rents are fueled by housing bennies it is probably better to rent than than tying your money up in deadweight for the foreseeable. If inflation was threatening, and I am more of a deflationist, buying now makes sense. The CEBR are probably just ramping what they have a VI in.

This 'shortage' makes prices go up theory is only true in a normally operating marketplace. Where there is a loss of confidence ( about to jump off the cliff any minute now I say) then no shortgage will make the market tight again. In fact there are too many people in the UK and they have no longer got much disposable income - the ATM and remortgage man have gone. Real incomes are falling for most. So, I expect prices to fall year on year. The true house price norm will be resumed and it's anything up to 50% off depending on area and how over frothed the market is. In most cases, the higher they went the harder they fall. The affordability lie is also not being swallowed - interest rates cannot stay at 0.5% forever - normal mortgage rates will resume within a few years. Who can pay 5-8% for the loan?

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The average house price at the moment is £219,000, so this would be a 9% fall, not a new peak. (Halifax and Nationwide don't report average house prices, they report the price of the "average house", which is more like a median than an average. Land Registry use the geometric mean rather than the arithmetic mean, which is significantly lower. As far as I know, the LSL/Acadametrics index is the only one that actually reports average house prices.)

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Property:

Inflation = Real price drop.

Deflation = Nominal price drop.

Rents:

Determined by wage and housing benefit increases.

Property and rent prices are both determined on availability of funds and interest rates......at the moment we are maxed out on funding with the lowest rates in recent history therefore we have reached saturation point stagnation ..... ;)

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Here's my own crazy prediction: average salary to reach an astonishing £65k by 2015. No less extraordinary than the CEBR's earnest claim - in fact it would salient. Or do CEBR expect that houses by 2015 will still be being bought by those who cannot pay? :lol::lol:

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I wonder if the CEBR are commisioned by the Express? Here are some of their past gems:

Prediction made in Aug 2009:

Fail. They fell in 2010 and have been flat this year.

Prediction made in Feb 2010:

Fail. One and a half years into their prediction, prices are lower than when they made it.

Prediction from May this year:

CEBR talk such relentless b0llocks, it's a wonder no-one in the press ever checks their previous 'predictions' before republishing their ridiculous press releases.

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  • 335 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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