What are the house price predictions?

Posted on 21 May 2008

I am a first time buyer who wants to buy a flat in London. Some people are saying to wait as prices are expected to fall by 12%-18% over the next 2 years nationally. Can this price drop be expected in London or other "hot spots"? London prices seem to be in a bubble that is not typical of the rest of the country.

 

It’s important to remember that no one can tell the future, and we all have to be careful that while we hope for the best, we prepare for the worst. The predictions you see are an average, and it is true that there will be many affluent and improving areas that may stay the same value, and equally there are many properties in recently over-developed parts of some towns that could lose 40%. I have read from two London estate agents that only the properties in excess of £2m are continuing to rise in value.

If you want to buy now, you have saved an ample deposit, you can afford the monthly mortgage payments, and most importantly, you intend to live in your property long term, there is no reason that buying now should cause a problem.  After all, once you’re on the ladder, you will only trade up, and anything you move on to should have fallen in value too.

Nationwide, Halifax, The Land Registry and the Royal Institute of Chartered Surveyors give the most widely used indices for house prices, as well as some useful rationale for their predictions.

 

Category: Current rates & the market, First-time buyer

 

Answers provided in response to Ask Bea are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of Charcol Limited. All comments are made in good faith, and neither Charcol Limited nor Bea will accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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