Top tips for predicting house prices
How can I learn more about house prices?
Tips for learning more
- Do your own research. It doesn’t matter what the overall trend of the UK market is if you are trying to buy in a depressed or highly demanded area. Simply use one of the free house price services to find out how much properties are selling for in either your area or the area you are looking to buy. If you don’t know the postcode of the area then you can simply find this out by using the Royal mail postcode finder service
- Never trust an estate agent’s valuation of a property. They may well be right but they also have too much of a vested interest in the quick sale of the property to believe everything they say. Use a house price website, use your knowledge and intuition.
- If you want to know what is happening in the UK property market regarding house prices then look beyond the big headlines about property crashes. House price stories make big headlines because they sell newspapers. Look where the story has come from and we guarantee it will derive from one of the major property surveys, the bank of England or an economic research group. Names to look out for are Halifax, Nationwide, Hometrack, Office of the deputy prime minister, Rightmove, Council of mortgage lenders, propertyfinder.com, Capital Economics, Royal Institute of Chartered Surveyors. All of these will have a different view of the market. Each one has a different methodology and each one has a different agenda. Who is right is difficult to say, but the consensus for 2006 is that the market is slowly picking up but growth is negligible and that is the outlook for the next few years. However this website appears determined to tell everyone that the housing market is going to collapse House price crash .
- A good sign of rising prices and a healthy market is the number of developers building properties in the area, plus the number of properties being gentrified and redeveloped.
- If you are worried about your house price going down after you have bought the property and being drawn into negative equity in the next few years, please remember that negative equity only happens when you decide to sell a property. If the property market does crash, and most experts are predicting a stagnation rather than a crash, then hold on to your property until the market rises again, although you may have to wait a few years. So our tip is buy a property that you can expand in e.g. get more space that you need at the moment and look to the future in 5 years time, will you have a larger family? Will you be downsizing?
- House price predictions are a hugely subjective matter. If the experts from the government to the mortgage lenders to the estate agents to the economic advisers cannot agree then it is impossible to be certain. Remember the key things that do affect house prices are interest rates (high interest rates equal expensive borrowing equals slump in housing market), employment (high unemployment equals less disposable income equals less affordability and slump in market), and demand. In the UK property is still heavily in demand because of a lack of supply. Remember we live on a small island with a population of 60 million. The final factor which causes upward and downward trends in property prices is the number of first time buyer sin the market. In 2005 this was a very low figure around 400,000 compared to normally around 1 million a year. First time buyers are the essential ingredient in keeping the housing market moving, and if the bottom rung of the property ladder dries up few people can make the leap to the next rung.
Good luck and try too not worry or become to obsessed with house prices!
