Reuters: House prices will fall 2.4% this year and then return to growth, according to industry analysts (estate agents)

[Smith]

Reuters: UK home prices to fall, but unlikely to come crashing down

British home prices will fall less than previously expected in 2023, a new poll of analysts has found.

After years of bumper price rises, the average cost of a home will fall 2.4% this year, according to a poll of 19 housing market experts conducted by Reuters in February has found.

That’s shallower than the 4.7% fall predicted in a November poll. This month’s survey found that house prices are expected to rise by 1.0% next year on average and 3.5% in 2025.

Aneisha Beveridge at estate agency Hamptons predicts:

“It’s likely 2023 will be a year of transition as buyers and sellers adapt to a new era of higher interest rates before the market returns to growth again in 2024.”

Higher borrowing costs will weigh on the housing markets this year. The Bank of England is expected to raise interest rates in March, to 4.25%, with rates currently seen approaching 5% by the end of this year.

[Smith]

Turns out buyers just need to "adapt" to high interest rates and then it's business as normal.

[hotblack42]

12% real drop then.

What always ticks me off is that salespeople always insist that the market is about to 'bounce back' or 'turn a corner'.

I know for a fact from associates who work with sales staff that that's not how they talk in private.  Actually on a couple of occasions car salesmen have been surprisingly candid - while we are doing the paperwork after agreeing the sale of course!

It must be a strain sometimes to keep insisting all is rosy when you know the opposite is true.

[Sackboii]

8 minutes ago, hotblack42 said:

It must be a strain sometimes to keep insisting all is rosy when you know the opposite is true

You could say the same in reverse. Perhaps it's a strain to insist everything is all doom-and-gloom 24/7 when there is a shimmer of light in the dark sky.

Oh, wait..

[Hullabaloo82]

All 3 houses on my street that have been sat on the market since interest rates started going back up have sold in February (including one that had been on the market for over a year and one, in my view at least, ludicrously over priced place). 

Does feel like a bit of confidence might be returning. 

 

 

 

 

[henry the king]

20 minutes ago, Smith said:

Reuters: UK home prices to fall, but unlikely to come crashing down

British home prices will fall less than previously expected in 2023, a new poll of analysts has found.

After years of bumper price rises, the average cost of a home will fall 2.4% this year, according to a poll of 19 housing market experts conducted by Reuters in February has found.

That’s shallower than the 4.7% fall predicted in a November poll. This month’s survey found that house prices are expected to rise by 1.0% next year on average and 3.5% in 2025.

Aneisha Beveridge at estate agency Hamptons predicts:

“It’s likely 2023 will be a year of transition as buyers and sellers adapt to a new era of higher interest rates before the market returns to growth again in 2024.”

Higher borrowing costs will weigh on the housing markets this year. The Bank of England is expected to raise interest rates in March, to 4.25%, with rates currently seen approaching 5% by the end of this year.

This is so funny.

Just no basis for it whatsoever. Just a presumption that prices always go up innit. 

And people will easily adapt to high interest rates apparently. You just adapt and then its fine. You can then pay 10x earnings for a house. 

[henry the king]

4 minutes ago, Hullabaloo82 said:

All 3 houses on my street that have been sat on the market since interest rates started going back up have sold in February (including one that had been on the market for over a year and one, in my view at least, ludicrously over priced place). 

Does feel like a bit of confidence might be returning. 

 

 

 

 

Things always start to move at this time of year. It is why the house prices indexes are seasonally adjusted. 

Consumer confidence has returned somewhat but that will just lead to higher interest rates as inflation will remain high. 

The circle cannot be squared. House prices went up due to cheap money (source: BoE and common sense). That is over now. So logically prices now decrease over the medium term. How that is achieved who knows, but prices are and will decline. There might be small rises in there or flat periods or rapid falls. Who knows. But the fundamentals dictate falling prices and that cannot change. 

Edited February 28, 2023 by henry the king

[Stjames83]

Backs up the Guardian article I referred to yesterday. I have always said that due to decades of HPI the market is now effectively insulated from borrowing costs, and this graphic proves it

In short, there’s enough equity in the system to keep the wheels turning, irrespective of borrowing costs.

Yes, the market needs a critical mass of new FTBs joining at the bottom, but my experiences buying last year say there are still more than enough younger high earners / BOMAD users out there.

[henry the king]

7 minutes ago, Stjames83 said:

Backs up the Guardian article I referred to yesterday. I have always said that due to decades of HPI the market is now effectively insulated from borrowing costs, and this graphic proves it

In short, there’s enough equity in the system to keep the wheels turning, irrespective of borrowing costs.

Yes, the market needs a critical mass of new FTBs joining at the bottom, but my experiences buying last year say there are still more than enough younger high earners / BOMAD users out there.

You are already down money on your house by the way. You are pissing away thousands of pounds every month right now because you bought in 2022.  

[TheCountOfNowhere]

48 minutes ago, Smith said:

Reuters: UK home prices to fall, but unlikely to come crashing down

British home prices will fall less than previously expected in 2023, a new poll of analysts has found.

After years of bumper price rises, the average cost of a home will fall 2.4% this year, according to a poll of 19 housing market experts conducted by Reuters in February has found.

That’s shallower than the 4.7% fall predicted in a November poll. This month’s survey found that house prices are expected to rise by 1.0% next year on average and 3.5% in 2025.

Aneisha Beveridge at estate agency Hamptons predicts:

“It’s likely 2023 will be a year of transition as buyers and sellers adapt to a new era of higher interest rates before the market returns to growth again in 2024.”

Higher borrowing costs will weigh on the housing markets this year. The Bank of England is expected to raise interest rates in March, to 4.25%, with rates currently seen approaching 5% by the end of this year.

There is already at least a 10% fall in the pipeline and the wheels are coming off any the housing bubbles round the world and still the UK propagandists just wont stop.

It's a shameful period in history and while this sdam persists the young ought to be voting with their feet and leaving.

[TheCountOfNowhere]

14 minutes ago, Stjames83 said:

 

Yes, the market needs a critical mass of new FTBs joining at the bottom, but my experiences buying last year say there are still more than enough younger high earners / BOMAD users out there.

Man who bought last year at all time 200 year high says prices wont fall

Edited February 28, 2023 by TheCountOfNowhere

[Stjames83]

And there’s me thinking I’d get a substantive response from @henry the king and @TheCountOfNowhere 

Of course I wouldn’t

[nero120]

47 minutes ago, Hullabaloo82 said:

All 3 houses on my street that have been sat on the market since interest rates started going back up have sold in February (including one that had been on the market for over a year and one, in my view at least, ludicrously over priced place). 

Does feel like a bit of confidence might be returning.

The important info is not that they sold, but what they sold for. How much over or under asking did they sell for? That's what you really need to know to figure out the state of the market right now.

[MARTINX9]

Is there a legal definition for a 'housing market expert' - as opposed to a housing market vested interest?

If they really thought house prices would fall would estate agents say so - as their business model is driven by confidence and sales?

[Sackboii]

13 minutes ago, nero120 said:

The important info is not that they sold, but what they sold for. How much over or under asking did they sell for? That's what you really need to know to figure out the state of the market right now.

Not only that, but 'sold in february' - we're still in February! It hasn't sold. Not until they exchange contracts, which is likely to be another 3 months still. A lot can happen between now and then. They aren't 'sold' until the new owners have the keys.

[Clarky Cat]

1 hour ago, Hullabaloo82 said:

All 3 houses on my street that have been sat on the market since interest rates started going back up have sold in February (including one that had been on the market for over a year and one, in my view at least, ludicrously over priced place). 

Does feel like a bit of confidence might be returning. 

 

 

 

 

Well we're moving into the traditional "spring bounce" season and mortgage rates had been reducing slowly over the past few months too, so this is understandable.  Bond yields now going back up again - eg 2 yr now at comparable levels to the Truss period. Mortgage rates are going back up.

 

Edited February 28, 2023 by Clarky Cat

[nero120]

2 minutes ago, Sackboii said:

Not only that, but 'sold in february' - we're still in February! It hasn't sold. Not until they exchange contracts, which is likely to be another 3 months still. A lot can happen between now and then. They aren't 'sold' until the new owners have the keys.

Indeed!

[Unsafe As Houses]

Link to article:

https://www.reuters.com/world/uk/uk-home-prices-fall-unlikely-come-crashing-down-2023-02-28/#:~:text=LONDON%2C Feb 28 (Reuters),analysts polled by Reuters said.

Never trust an anonymous 'expert'  

[70PC]

1 hour ago, Smith said:

Reuters: UK home prices to fall, but unlikely to come crashing down

British home prices will fall less than previously expected in 2023, a new poll of analysts has found.

After years of bumper price rises, the average cost of a home will fall 2.4% this year, according to a poll of 19 housing market experts conducted by Reuters in February has found.

That’s shallower than the 4.7% fall predicted in a November poll. This month’s survey found that house prices are expected to rise by 1.0% next year on average and 3.5% in 2025.

Aneisha Beveridge at estate agency Hamptons predicts:

“It’s likely 2023 will be a year of transition as buyers and sellers adapt to a new era of higher interest rates before the market returns to growth again in 2024.”

Higher borrowing costs will weigh on the housing markets this year. The Bank of England is expected to raise interest rates in March, to 4.25%, with rates currently seen approaching 5% by the end of this year.

Link below and note:

"Feb. 15-27 poll of 19 housing market experts."

https://www.reuters.com/world/uk/uk-home-prices-fall-unlikely-come-crashing-down-2023-02-28/

 

[mynamehere]

The root of of the confidence according to the article, is the tight labour market

people have “adapted” to higher rates because they have confidence in their job security and future wage growth. An extra 300 quid on a 5yr mortgage is easier to adapt to if you are relatively confident you are going to get a pay rise every year. 
 

Inflation is a problem but doesn’t tend to factor in a home buyers spreadsheet. 

[scottbeard]

1 hour ago, Smith said:

After years of bumper price rises, the average cost of a home will fall 2.4% this year, according to a poll of 19 housing market experts conducted by Reuters in February has found.
...
“It’s likely 2023 will be a year of transition as buyers and sellers adapt to a new era of higher interest rates before the market returns to growth again in 2024.”

Mortgage costs increase 30%

House prices fall 2.4%

Based upon finger in the air estimates of people with a vested interest in house prices rising

Seems legit 🙄

[henry the king]

29 minutes ago, mynamehere said:

The root of of the confidence according to the article, is the tight labour market

people have “adapted” to higher rates because they have confidence in their job security and future wage growth. An extra 300 quid on a 5yr mortgage is easier to adapt to if you are relatively confident you are going to get a pay rise every year. 
 

Inflation is a problem but doesn’t tend to factor in a home buyers spreadsheet. 

A tight labour market is the thing which will drive interest rates higher.

So that confidence is just uneducated.

The perfect scenario for house prices to remain high is that the labour market loosens a lot so they can pivot and lower rates.

[mynamehere]

2 minutes ago, henry the king said:

A tight labour market is the thing which will drive interest rates higher.

So that confidence is just uneducated.

The perfect scenario for house prices to remain high is that the labour market loosens a lot so they can pivot and lower rates.

Uneducated or not, labour confidence drives sentiment. 

It won’t necessarily drive rates higher. If energy costs cut inflation in half, sunak may choose to let the economy run hot, rather than pay the steep price for raising rates with seemingly little reward to show for it. 

[henry the king]

Just now, mynamehere said:

Uneducated or not, labour confidence drives sentiment. 

It won’t necessarily drive rates higher. If energy costs cut inflation in half, sunak may choose to let the economy run hot, rather than pay the steep price for raising rates with seemingly little reward to show for it. 

They won't have the choice. Have you not learnt that yet? 

If the BoE or if the government ignore reality then you end up with the £ down 30% and inflation sky-rockets. 

We are already dangerously close to a wage-cost spiral. They aren't going to allow that to take off because the results would be disastrous. 

[mynamehere]

5 minutes ago, henry the king said:

They won't have the choice. Have you not learnt that yet? 

If the BoE or if the government ignore reality then you end up with the £ down 30% and inflation sky-rockets. 

We are already dangerously close to a wage-cost spiral. They aren't going to allow that to take off because the results would be disastrous. 

Of course they have a choice. Have you not leant that yet?