Your report is full of contradictions and inaccuracies. Average house prices down by £40,000 in 2009. Predict average house price of £57,000 in Dec 2009. Presume you mean £157,000 which is a 20% drop. Should be good for our childrens generation. However we are not seeing a significant drop in any houses that you would want to buy. We have just sold in the South West and dropped 7% on asking price which we set 1 year ago. Media hype means that we will rent for at least 6 months in the hope of picking up a bargain. However there are few bargains around. The bargains are in secondary areas or in poor condition. Any thing good appears to be holding its price. We dropped 25% in 1991 so we are no where near that yet.

We are in the early stages of a decline in house sales, prices and availability of mortgages.  Give it a few more months and the market will slowly crank up again as vendors accept that house prices will not return to what they were one year ago and before they see a further decrease will sell at a realistic figure.  House prices will eventually rise but at a gradual rate.  Those not in negative equity can still buy and sell; what you think you've lost on yours you recoup on the bargain to be had from your next purchase.  

I agree with Stephen.
This is media-hype at its worst...obviously not checked or proofed by anyone.
40% or 40,000??? £57,000 ?????? Who knows?
Just kind of makes the whole thing meaningless
Come on guys, you can do better than this.

The media have hyped up the Housing Market problems (particularly the BBC and the Daily Mail who seem to sensationalise everything and to even gloat at the situation). They have seemingly been on a crusade to make any problems worse.
As a solicitor dealing with residential conveyancing I have seen our volumes drop signoificantly over the last year (often with buyers withdrawing just because they have been convinced by the media that they are paying too much for a particular property).
The introduction of HIPS, the Northern Rock fiasco and the credit crunch have all contributed to the situation, but the main problem now is the mortgage companies and banks. They need to pass on the majority of the benefit of cuts in interest rates to existing borrowers and to start to lend to new borrowers at reasonable rates.
Interest rates will fall to historically low levels which will make paying your existing mortgage affordable and give new borrowers the opportunity to buy (providing the lenders do their bit).
Unfortunately (just like the petrol companies,the supermarkets and the utility companies) banks are in it for their own profit and not for the benefit of the country in general (even though we taxpayers effectively bailed them out recently) and they will continue to look after themselves first.
These announcements by Nationwide and Halifax every month do nothing to help the situation and predicting what will happen is futile (mere guessing). Ultimately with interst rates low and banks seemingly "unsafe" I'd say bricks and mortar are a good place to have your money (shares went down 25% in one week recently).
If you can get a bargain (and there are some out there) start thinking about buying now, because I predict rapid growth again once the market bottoms out. I'd say by the middle of 2009 we will see activity increasing (not necessarily prices) - Gordon Brown is banking on everything being on the up again by May 2010 (the next General Election).........although he's using our funds gambling on this!!

I live in Oz but have a house in Uk.
I look at the websites regularly.
House prices are crashing. Isnt that how  youd describe a drop of between 10-30% in the past 9 months, when prior to that they showed positive growth? Ive seen house in Northampton listed for 70k that would have been 100k+ last year.
I do expect some houses to drop up to 50% with some being 20% so 40% would be a fair average.

With unemployment and recession biting dont expect people to go out and take on big mortgages. even 3% of say a 100,000k P+I mortgage  is around 583 pounds pm. Doesnt look good when the same house can be rented for 500-550pm.
Dont expect houses to bounce back tooo quickly it took 8 years last time in the 1989-1997 bust.

Still all the fundamental are there for BTL to do well.

Once loans become easier to obtain, which can't be far off, house prices will recover. Unless one HAS to move now, the prices, stay put and prices will recover. The US has reduced interest rates, We surely can't be far behind. The world has suffered a downturn, but is slowly, very slowly, recovering!

Matthew

How can the world be slowly recovering when china is experiencing around a 20% in growth?
Is the spectre of unemployment in USA,UK,AUS,China etcetara  a reason for growth.
decreasing interest rates are there to stimulate a flagging economy. USA has had low rates for yonks (yanks) and they are being laid off in the 10s of thousands.
Australia is the same, our unemployment rate is tipped to grow from 4.4% to over 6%. I cant imagine it would be any rosier in UK.

The guvnr of BoE said recession last week didnt he.

The recession is only just happening- the tsunami is far out at sea at the moment wait until after xmas and the sales are down and the lay offs happen in earnest,then say your recovering then wait for that tidal wave to really hit.

Wasnt it easy loans that got us here in the 1st place?

Yes loans may be easy to obtain but if the Banks think for one moment that house prices may falter, what LTV do you think they will offer?
110%? 100%? 90%? 80%?
reckon on 80% to give them the buffer- so yep loans at 2-3-4% buthave you got a 20% deposit?
And what about the valuers, do you think they will ratchet up a properties value, no of course not theyll play it safe,to cover themselves.Thus driving the prices even further down.

Look Toykos house prices dropped 70% in the last crash.
Japan has had 0% 1% loans for over a decade and they are still not back to where they were in the early nineties.

So would you like to reconsider your views?

I wish I had happier sentiments.

oops chinas 20% decrease in growth and dropping.
Why do you think the oil price is dropping and why have the big miners dropped in value BHP and Rio tinto?
Cos the WORLD is in recession.

Stephen, Daniel: Well spotted with the typo -- yes, it's supposed to read £157,000, sorry about that. Corrected

Just a note to say that this is a report on the CEBR's findings, not our opinion on the market!

stepehn, doesn't your fall in price sort of back up the article anyway?

A separate study...confirms the market has hit a brick wall, with prices falling by 7% in the last 12 months.

We have just sold in the South West and dropped 7% on asking price which we set 1 year ago

that figure of 20% is their prediction over 2 years - i.e. 2007-2009, obviously based on it falling more sharply in 2009.
although what happens in the future could be anyone's guess ...

Beingsalt you are quite right about our price drop. However what I did not say was that we purchased the house in April 2006 and sold in July 2008. In two years we managed a 12% gain on our original outlay. We were hoping for a 20% gain - right house right place - but the city had already shown its weakness and papers were predicting the downturn. What I was trying to get over is that the market is not as bad as the hype is having us believe.

The reality is you will need a deposit from now on, old fashioned but not a bad thing really.
Would you lend to somebody without a bit of security?
Those with a deposit should be buying now, mortgages and properties are available.
Those who are trading up should absorb loss on there property if their vendor is willing to do the same.
Those without deposits should save or forget it, but don't moan because you can't get on the ladder, you will need money to get on the ladder so save some before house hunting.
I bought my first house in 92 and think this is a similar time in the housing market

Billy said all the fundamentals are there for BTL to do well. But how. If in two years time the prices will be back to 2004 level or therabout, that would mean a BTL invester has not seen any capital increase over a five year period. As regards to the rent, that just goes to pay your loan and bills. So you have not made any money at all. The future of BTL market is by no means certain.

Does good citizen have any BTLs? Do they have a good accountant?
One shouldnt expect capital gain to supply all the return on a property. In fact many investors ,donot search for capital increases that is just the icing on the cake.

I have seen houses for sale in Northampton for 70k.
Suppose you have a 75% LTV (therefore need a 17.5k deposit)
You have a loan for at 52.5k at 5% I/O 2625pa.

you let for 575pm 6900pa - costs  750 agents, 250 gas,electric certs.
equals 5900pa income.
minus the 2625pa loan = 3275profit.

your cost has been 17.5k plus solicitors say 1k  =18.5k
so 3275 on 18.5k
isnt that 17.7% ROI.
excluding taxes.
billy