Uk House Prices to Fall by 2007
Leading financial experts from the Centre for Economic and Business Research are stating that, “Fewer homes will sell and prices will edge down - but they won’t collapse”. The reports says they expect house prices to fall by 5% by 2007. Nationwide’s housing expert Fionnuala Earley agreed with the view saying “The market is cooling slowly, but behaving remarkably well. By 2006 we expect prices to be neutral or see small falls, but nothing too drastic”.
As always economic predictions like this should be taken with a pinch of salt, as no one can fully predict the housing market. These seem like reasonable estimates simply because first time buyers are getting priced out. If first time buyers stop buying then the bottom will fall out of the market. However with interest rates dropping and a reported rise in mortgages in June it looks like there might be a little life left in the market. It seems that house prices have definately hit the peak and they are levelling off with perhaps a slight drop.
I have just done a little research. Last year the Centre for Economic and Business Research said that in 2005 house prices would fall by 7%. In reality house prices have pretty much stagnated. Halifax have seen a decrease of just 0.1% and Nationwide have actually seen an increase of 0.5%, as you can see these so called economic experts are often wide of the mark.
The Council of Mortgage Lenders yesterday revised the house price estimates. Initially they predicted a 4% increase for 2005, but now say they expect a 2% drop.For 2006 they think prices will remain static with a recovery in 2007 with a 2% increase. All of that equates to over the next two years house prices remaining pretty much the same.