House Price Forecast 2012

House prices are falling, is this is set to continue for the rest of 2012

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Britains largest mortgage lender, Halifax has reported that there has been an improvement in house prices over the last year, but has stated that prices will not rise this year.

According to Nationwides house price index, house prices fell by 0.6% in the month of June and the average house lost 300 off its value.

Rightmove has reported that prices have not had a knock on effect in terms of expectations, with asking prices hitting a record high last month rising by 1% to 246,476. However, it seems that in order to actually sell, people are having to drop the asking price on their property.

Newly built homes are rising in value much faster than older properties, rising 1.4% per year although the gap between previously owned and new builds is narrowing.

Long term, Economists at the CEBR predict that over the next five years, prices will go up by 15%, which is 2.8% annually.

The experts view:

CEBR: Prices will rise by 15% in the next five years.

Rightmove: Prices will rise by 2% this year

RICS: 3% fall this year

Nationwide: Prices flat this year

Halifax: 2% decline to 2% rise this year

Hometrack: 3% decline

The real problem faced by lenders is the crack down on interest only mortgages, the mortgage crunch, austerity measures and the Eurozone crisis. It is much harder for people to take out cheap interest only mortgages, which previously helped the market. In addition to this, lenders are still struggling with the Eurozone debt crisis.

Add to that the high cost of moving with Stamp Duty and legal fees, amounting to an average of 15,000.

Its a bit of a roller coaster ride at the moment, difficult to call on way or another but clearly the present negative economic figures are not encouraging in the short term. If anything economic uncertainty is not helping matters, it might be a Slow motion crash or just a very gradual recovery, its too early to call.

At the end of the day we all need a roof over our heads so it's either buy or rent, pays your money, takes your chance.

For more information on Mortgage Savers click here : House Price Forecast 2012.

by: Richard Ignatowicz

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