Global Property Guide Poll
How badly will UKs housing market crash?
After 12 years of continuous annual increases, house prices in UK have dropped.
After six monthly declines in a row, house prices slipped by 1.1% in April 2008 from a year earlier. The average property price was £178,555 in April 2008, 4% lower than the peak level of £186,044 in October 2007, according to Nationwide.
The recent price falls signal seem to signal the end of UK’s house price boom (average house prices rose by around 190% from 1997 to 2007).
The question now is “By how much will house prices in the UK fall?”
An overwhelming majority (80%) of Global Property Guide readers say that at least 2 years of house prices fall is expected. The sour mood is also reflected in the comments we received for this poll.
Only 13% is optimistic that only a slight correction will happen. While 7% think that the situation will depend upon the action of the authorities.
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How badly will UK’s housing market crash?
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Your Comments
posted by Sergei | 2008-05-27
UK
I agree it is a buble. prices are insane. there is a long way to drop
posted by Ram Sriram | 2008-06-11
Accountant, London
Price may fall by 15%
posted by Daniel Kay | 2008-06-11
Director Balloon Investments, UK
Banks are forcing prices down in the new build buy to let market by only offering mortgages with high deposits, high interest rates and rental multiples. We are seeing developers offer as much as 50% off in order to make these figures stack up to fit into the new buy to let criteria. This going to have a knock on effect and the worst is yet to come. Overseas property is where most investors are now looking to build on their portfolios with Germany, Brazil, Egypt and India been excellent performers recently.
posted by justin | 2008-06-19
i think prices will fall until the rental yield of the property is higher than the cost of money example 6 to 7 percent and then it will level out again
posted by Paul F | 2008-07-14
Owner - International Property Directory, Canada - Previously UK
We have been predicting for 5 years that the multiples of LTV don't add up when taking earnings into account. Take away easy money and the market is very exposed - much more so than the US in our opinion. Unless easy money returns the UK economy will collapse - let alone housing.
posted by Andrew McNeill | 2008-07-14
Analyst, Copenhagen
House prices in the UK are a direct reflection of the cost of money (interest) and the availability of it. With interest rates increasing and credit availability decreasing the outlook is dire. I expect the bulk of the price drops to have occurred by the end of 2010. By that point in time prices should have overshot the long term mean which implies drops of greater that 40% in nominal terms (should inflation stablise).
posted by David Durham | 2008-07-28
Property Developer/Investor, UK
The UK is a large and diverse market, which is not well suited to group analysis. There will be areas of the market that will expereince little if any downturn, e.g. second and tird tier towns of 50k-100k population where the appartment boom never hit, are stretched by lack of supply. Rental yields are booming, and capital values are holding. There's gold behind the headlines if you're able to see that far.