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Alison Cork: The truth about house prices

From ITV’s Homes & Property and Don’t Move, Improve, property expert Alison Cork reveals why house prices could finally be set to fall, in our exclusive column

You read it here first – I’ve detected the first ripples of unease among estate agents and it gives me no small crumb of satisfaction. It also spells good news for those people set to take their first steps on the property ladder – if they’re prepared to wait.

Estate agents have been having a ball recently and – simply because it suits their purpose – have refused to recognise the chance of any potential downturn in the market. Talk to any agent, and they’ll say prices can never do anything except go up – which is why you must buy now and pay over the asking price, didn't you know?

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Force of gravity

But that ain’t necessarily so – and, me, I'm with Isaac Newton on this one: what goes up must come down. Prices simply cannot keep rising out of all proportion to people's ability to earn, and thus pay their debt. I haven’t checked, but I’m confident that salaries at the Royal Brompton, Chelsea didn’t rise by 24%.

Something somewhere has to give. And I'm happy to tell you, that it is.


Alison Cork: The truth about house prices

My last piece was written in the midst of what we now know was the sunset of the rising market – only you wouldn't have known it if you had just listened to “professional” advice. I really did feel like a lone voice, expressing my own very real doubts about the stability of the market.

Now, only a few weeks later, things are very different – but don't expect estate agents to admit this. They’re still clinging steadfastly to what appears to be the mast of the wreckage. But far more interestingly, it's the subtle editorial shift of the newspapers that we should be looking at.

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For the first time in more than a year, newspapers are beginning to change their editorial tack – prices are still rising in some areas, but outside London the picture is somewhat different. Far from achieving more than the asking price, homeowners in some areas are now acknowledging that for the past several months, they have been unable to shift their properties.

The unreal market

Hang on a minute – for the past several months? Surely that was in the midst of the so-called property boom? Ah yes: there are lies, dammed lies and editorial. We should all have learned by now that what we read in the papers is what the powers-that-be want us to believe: it's information presented in a particular way. If political campaigns have been fought and won this way, why should it be any different with regard to property?

This is especially pertinent when you remember that newspapers only survive if they have advertisers, and property-related advertisers would not be especially happy if the message was all doom and gloom. I am not for one moment suggesting that advertisers call the shots editorially, but you can see how there might be an occasional subtle shift in emphasis, just to keep everyone happy.


Alison Cork: The truth about house prices

Now the hysteria of rising house prices is calming down, it's easier to see the facts for what they are – and equally easy to see that we were all being a little silly to believe house prices had been rising at a uniform rate throughout the country for the past year or so. Prices have risen in some places and not in others, simple as that.

London is a different matter, and it is the market there which has undoubtedly coloured editorial everywhere. Everyone loves a sensational story, a bit of gossip, and what better than to be able to shout about the first ever £3m one-bedroom flat, in Eaton Square, Belgravia? Makes a great headline. But Eaton Square is not Tottenham (with the greatest of respect to the latter), and clearly, there are no £3m one-bed flats to be found there.

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Plunging prices

And while we are on the subject of Eaton Square, even there I have detected a distinct softening of prices in the last few weeks. That is to say, not so many people foaming at the mouth to give money away, and a few more properties available. And that's all it takes: just a tiny bit of movement, and you have a 5-10% price differential staring you in the face.

And if that wasn't enough, Governor of the Bank of England Mervyn King has waded in, threatening to keep putting interest rates up – just as a little slap to remind us all that he’s the boss and will be obeyed. Good for you Mervyn, I say: that's telling us. Now that's one form of penalty I don't mind paying, because it will bring back some sanity to the market place – and if 6% is the bucket of cold water we all need, then so be it.

Alison Cork is a property journalist and presenter of ITV’s Don’t Move, Improve! and Homes & Property, she founded online lifestyle portal Homes & Bargains - the place to find quality products for the home at affordable prices. Alison also runs Problem Solved - the UK’s largest directory of recommended, local tradespeople.

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Actually Alison Cork seems to be more of a bargain home improvement / interior designer rather than a property ramper so I'll remove my previous comments.

Edited by christh

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Guest casaloco

www.orange.co.uk is the homepage for all the Freeserve/Tiscali/Orange broadband and dialup customers, as well as anyone with an Orange mobile with the internet on it.

Probably several million people.

Shit/Fan etc.

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