As the new year has arrived, its only fitting that we start analysing the market and try to figure out what we are to expect from the market in the year to come and then we may be able to form a suitable strategy to make it a successful year. There are a few conflicting opinions in the the media and altogether many factors that need to be considered. Here is a few main ones covered from sources and opinions in the media, let’s try detangle and make sense of the information.
House prices to drop 2% in 2011 on ‘weak demand’, UK house prices fell for a sixth month in December and will extend their decline in 2011 on “weak” demand and tighter mortgage-lending conditions.
The average cost of a home in England and Wales dropped by 0.4% during December , according to the housing intelligence group.
The drop was driven by the ongoing shortage of buyers, with estate agents reporting a further 4.8% fall in the number of people registering with them in December, the sixth consecutive monthly decline.
The major lenders’ indexes are likely to end up showing house prices dropped between 1% and 2% in 2010, how severe the drop will be – they put it at a whopping 10% next year.
prices will manage to rise slightly as the wider economic recovery continues, up 1.2% in London and 0.8% elsewhere. They are also more positive about the past year, calculating prices were up 1.8% by mid-December.
Office for Budget Responsibility (OBR):
The independent fiscal watchdog predicts that prices will fall 2.7% in the coming financial year.
In London and the South East it is difficult to agree to major price drops, sellers will hold out at higher prices, suggesting activity will stagnate however prices won’t drop significantly, especially due to continual foreign buyers in the market. However in the wider country as people get desperate to sell or move due to new jobs etc…prices will inevitably drop.
Look out for the the rest of this series of article: Rentals, Lending, Market Activity, Interest rates
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