Property prices & values- up or down?

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    Property prices & values- up or down?

    Property price fears fuel growth in rentals

    By Elaine Moore

    Published: August 10 2007 16:29 | Last updated: August 10 2007 16:29

    Demand for rental accommodation is outstripping supply at the fastest rate for six years as fears grow that further increases in interest rates may trigger a property price crash.

    Letting agents say rental demand has exceeded all expectations this summer and the trend is widely expected to continue for the next year.

    The Association for Residential Letting Agents (ARLA) says the level at which demand from tenants is outstripping supply from landlords is at its highest since they began conducting surveys about six years ago.

    “Everyone has their own theories as to why this is,” said ARLA spokesman Malcolm Harrison. “Part of the reason is down to simple demographics because there are more single people looking for housing. But it is probably also to do with a fear of house prices softening.”

    The UK housing market has remained buoyant despite a series of interest rate rises from the Bank of England but the number of properties available to rent has been reduced as buy-to-let investors reallocate assets away from property.

    “Landlords are leaving the market and investing elsewhere because they feel it’s a good time to make the most of their capital,” said Tim Hyatt, head of UK lettings at Knight Frank estate agents.

    “We have seen a 15 per cent reduction in instructions this year and this is indicative that people are feeling uncertain about where the house sales market is going.”

    Fears of a slowdown or potential housing market crash have led more people to eschew purchasing a property in favour of renting.

    Across the country letting agents say they have seen a huge rise in rental agreements this year with central London witnessing the greatest growth of activity.

    Summer is traditionally a busy time for letting agents as graduates, relocated professionals and families moving to prime school catchment areas, vie for rental accommodation.

    Savills says the top end of the market in central London has outperformed the rest of the sector because of the influx of wealthy international tenants this year.

    With fewer properties to choose from, and greater competition. tenants are signing lengthier contracts to secure properties.

    Knight Frank says the average contract length has increased from 13 months to two years.

    For those who have had to renew rental contracts, landlords have been able to charge significant increases. Chesterton says annual rental inflation topped 20 per cent in June in London.

    Agents say rents have increased across all property types. “In some instances properties are being let for more than the asking price,” said Virginia Skilbeck at Douglas & Gordon estate agents.

    This has not yet had an effect on landlords’ yields, which have reduced from 5 per cent to 4.8 per cent for houses in the last year as a result of rising house prices.

    House prices in the UK are still at a historic high compared with earnings. In July house price indices showed the housing market was slowing. The trend was bucked by London, where the market grew slightly.

    According to one ratings group housing yields are now lower than bond yields, making property rental increasingly unattractive to investors.

    This week the Bank of England signalled another interest rate rise in the near future, to 6 per cent.

    “Another rate rise will make affordability more difficult for property owners and is likely to increase demand for rental accommodation even further,” said Mark Anderson, managing director of Hamptons Residential Agency.

    http://www.ft.com/cms/s/74382936-474...0779fd2ac.html

    #2
    House prices up or down?

    Another month and more house prices falls according to the Rightmove survey. 0.7% this month.

    http://uk.reuters.com/article/domest...071119?sp=true

    Any predictions for house prices this next 6 months?

    Comment


      #3
      Originally posted by Colincbayley
      I predict that they will either go up, go down or stay the same!
      I'm not so sure...
      JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
      1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
      2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
      3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
      4. *- Contact info: click on my name (blue-highlight link).

      Comment


        #4
        Originally posted by Colincbayley
        I predict that they will either go up, go down or stay the same!
        I predict all three. Though not at the same time.

        Peter

        Comment


          #5
          Originally posted by pcwilkins View Post
          I predict all three. Though not at the same time.
          Why not? Some can go up whilst others can do down.
          There is no real meaning in an "average" price anyway. It's only available so that dinner-party guests and journalists have a topic for conversation!
          Every house is unique, and no house is sold every single year such that one could track that house's rise/fall in price.
          JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
          1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
          2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
          3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
          4. *- Contact info: click on my name (blue-highlight link).

          Comment


            #6
            If buying make sure it has already gone down
            If selling making make sure it has already gone up
            If not buying or selling why would you care ?
            A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.
            W.Churchill

            Comment


              #7
              Originally posted by jeffrey View Post
              Why not?
              Hey, I didn't say it was a rational prediction.

              Peter

              Comment


                #8
                I think prices will come down over the next few years however certain areas will hold there value better. The older properties in portfolios should be fine its just the ones bought in the last few years are at most risk especially in the cities outside London, Manchester comes straight to mind.

                Comment


                  #9
                  I predict that people spend too much time trying to second guess the market.
                  Kind Regards,
                  David Croissant

                  Comment


                    #10
                    Originally posted by dmc View Post
                    I predict that people spend too much time trying to second guess the market.
                    I'm not sure that is a prediction??

                    Comment


                      #11
                      houses are the better option, even if the market was to crash!!
                      apartments normally lose value especially in Manchester and surrounding areas.
                      Steer clear of investment companies, they are a con, especially Inside Track and Complete Property...what you pay for is the investment product not the development!

                      Comment


                        #12
                        It looks bad for all newbuilds, especially the ones still being built. However older properties will hold there value better.

                        Comment


                          #13
                          the prices may change but a house is still worth ....a house!

                          Comment


                            #14
                            House prices down 6.8% this month in London RIGHTMOVE

                            Prices have tumbled 6.8% in London and 3.2% across the country this month according to Rightmoves figures today. They blame HIPs but I think it has more to do with restrictive lending due to the credit crunch. Any thoughts

                            http://www.bloomberg.com/apps/news?p...4iY&refer=home

                            Comment


                              #15
                              Originally posted by Brit1234 View Post
                              Prices have tumbled 6.8% in London and 3.2% across the country this month according to Rightmoves figures today. They blame HIPs but I think it has more to do with restrictive lending due to the credit crunch. Any thoughts
                              Why the thumbs down? Isn't this good news?

                              Peter

                              Comment

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