For the last two years, UK house prices have bounced around. One month, they are up; the next they are down. November was a down month, but who knows, January could record an increase.
Overall, house prices are down 16 percent from their summer 2007 peak. Call me Cassandra if you want, but I don't think house prices will recover this side of 2020.
6 comments:
Summer 2007... when I bought my first proper house. Bah!
House prices might not "recover" for many years.If enough people decide that prices might go down then then the value that was given to a house when prices were considered to be sure to rise would become irrelevant.
How do you value a house that will cost you money over the long term and not "pay for itself".
>How do you value a house that will cost you money over the long term and not "pay for itself".
By comparing it to rent. If your rent is cheaper than amortising maintenance, interest, capital payments and capital losses over whatever the period you prefer - then rent.
Of course throw into that mix that you will get your rent paid for under more circumstances than a mortgage should you become unemployed.
If you feel that calculation is not much different from a WAG, you'll probably be right.
Dear Alice
Does the fall in the house price index allow also for the debasement of the currency since 2001?
This amounts to about 25%. A 16% fall in nominal values suggests the current real value of houses is about 37% down from 2001.
I hope this helps.
DP
They will never recover, and I hope at some point that rents and mortgages will again make up a lesser proportion of weekly outgoings, rather than one half, as they often do now. A home is to live in, not to gloat over over.
Ah yes, but currencies have a habbit of shifting around. Once it becomes clearer the Eurozone is a worse place to put your money then I predict sterling will rebound significantly.
Post a Comment