Are Property Prices likely to fall in the UK like they are in the US?

Question

The American property market is now falling on a year by year basis - we are told that UK house prices are overvalued if we look at the rise compared to the increases in people's incomes, will we see similar drops in value here? What is likely to crystalise this situation?

Answer 1

i sure do hope so! :-P

what goes up must come down

Answer 2

The housing market in America and Britain is completely different you cant compare the two. Britain is a nation of home owners or those who aspire to be homeowners America in comparison has a much larger rental market and compared to britain is much more contented to rent.

The most important thing to remember is where you buy. Some areas such as london prices are coming down slowly, though this is due to the difficulties of first time buyers coming onto the market, however in other areas prices are still increasing and will continue to do so. What is keeping the market bouyant is people buying to let over the past 10 years that is the reason why the market in the majority of the UK slowly increases. Look at the number of "to let" signs that go up on new housing developements especially flats. Property Investors are hoping that if they keep prices high we will become a nation of renters. Provided interest rates remain low this will continue if interest rates increase so that investors cannot afford the mortagage their will be a collapse in the market as they all try to sell, though this seems unlikely to happen for the forseeable future.

Answer 3

People are not buying at the moment as we have seen the first rise in interest. The longer the property sits on the market the more likely that the owners will let it go cheaper than what they wanted for it. Interest will rise again and sooner or later we will see the 10 year cycle come in. Property prices will go down but we will see interest rates very high that will push people to be reposed. Back in the 80's interest rates were 15% and you were paying nearly £750pm on a £46k mortgage. I'm sure that would be enough to stop most people from stepping on to the property ladder.

Answer 4

Yes, property prices are at a cyclical high relative to rentals, and likely to drop considerably in real terms, a cyclical low is probably about 5 years away. The turning of the market will be hard to see coming, as always, but a tipping point will come as the number of people who bust a gut to get on the bottom rung drops in relation to the proportion who decide to wait.

Answer 5

i believe UK house prices are overvalued, simply because even people with good paying jobs cant afford to buy!

ultimately that, coupled with any rises in interest rates will see off potential buyers & put existing owners in high debt under pressure..

cosidering the record UKs population credt debt, any drastic economic rocking of the boat could cause a real problem!!

Answer 6

Well...

Interest rates are on the decline again. Once again its going to be a buyers market.

Real-Estate is still going to be a much better investment then any other market, especially commercial property. Commercial Property is rarley going to devaluate, unless some other factor influences it.

Answer 7

People are still buying!

I've just put my house on the market and we are looking for a bigger house and better area.
You have to improve.... once you're on the ladder keep going till you got the biggest best thing you can afford then if the brown stuff does hit the fan hopefully even with a drop you will still see a profit and another house!

Answer 8

They haven't done so far, apart from the odd ups and downs that hit any market from time to time.

Home ownership in the UK is so high, that long term, bricks and mortar will always be a good investment. Peple are always going to need somewhere to live.

Answer 9

The UK also has a much stronger economy overall than we poor saps in the US have at the moment.

Answer 10

Yes, they are likely to fall for the next year at least.