Could there be a property crash in 2013?

[fred]

The head of Odey Asset Management has slammed the government for not properly understanding the economy and predicts that a house market crash is on the cards.

In an interview with the Evening Standard last week, Crispin Odey said that UK home prices are currently “right at the top of the cycle” and could be subject to a painful correction.

He insisted that the UK was in a depression, not a recession, and residential property prices needed to fall significantly before the country’s economy could start to recover properly.

http://www.martinco.com/lettings-age..._in_2013_-7207

[Iani]

Hmmm I say no.

Well ok I am no expert

My analysis is this though -

1. Negative equity. There is only so far house prices can possibly really fall. After that, people will just refuse to sell. Remember a house is only worth what someone will pay for it. If people refused to pay more than £2.50 for a mansion in Chelsea, then that mansion would be worth exactly £2.50. Simple as that.
People just won't let themselves be so short changed that they can never pay off their mortgages, they simply can't afford to - they will instead not sell and stay put (This would in turn put pressure on house availability and push prices UP).

2. The blasted buy to letters Well they have contributed to the house price increases anyway. If they decided to bail out of the market, then house prices would crash, however most of them are in it for the long term. What is more likely, is if prices came down, then these houses would be hoovered up by these "investors" - once again beating young first time buyers to the post. Again, this would stop the house price crash right in it's tracks.

3. Most analysts predict if anything prices to remain stable, and either have a small increase or small decrease. This is of course the same as a decreases as inflation will outstrip house prices.

4. I don't know really, anyone's guess

[somebody]

Hmmm I say no.

Well ok I am no expert

My analysis is this though -

1. Negative equity. There is only so far house prices can possibly really fall. After that, people will just refuse to sell. Remember a house is only worth what someone will pay for it. If people refused to pay more than £2.50 for a mansion in Chelsea, then that mansion would be worth exactly £2.50. Simple as that.
People just won't let themselves be so short changed that they can never pay off their mortgages, they simply can't afford to - they will instead not sell and stay put (This would in turn put pressure on house availability and push prices UP).

2. The blasted buy to letters Well they have contributed to the house price increases anyway. If they decided to bail out of the market, then house prices would crash, however most of them are in it for the long term. What is more likely, is if prices came down, then these houses would be hoovered up by these "investors" - once again beating young first time buyers to the post. Again, this would stop the house price crash right in it's tracks.

3. Most analysts predict if anything prices to remain stable, and either have a small increase or small decrease. This is of course the same as a decreases as inflation will outstrip house prices.

4. I don't know really, anyone's guess

Thats the problem while most people will find it hard to buy the property they want but someone will buy it as long as they can get a long time income on it.
Some friends when selling have stopped wasting so much time on doing up the house to much as they know in some locations the people who want to buy to extend and sell on or rent out are just looking at location and soundness of the buildings shell etc.

The only thing which will affect the buy to letters at least in the south east is if suddenly for whatever reason those who want to rent simply were not their in the numbers there are now. At present a decent property in a decent area put up for rent will be jumped on before the agent can put it up.

[Terpe]

The housing market continues to grow.
The number of both buyers or sellers has increased significantly recently

Latest reports indicate that the number of prospective buyers went up by 7% last month.

[joebloggs]

yes Terpe, it was on the beeb this morning about a property boom.

[DaveyWallis]

I talk to estate agents quite regularly and there's a real buzz developing now about the housing market.

This week one told me that the next 6-8 months is the time to buy as after that the prices will really start to take off.

According to the Halifax prices rose by 2.6% in the last year whilst the Nationwide showed a 1.9% increase.

That's still lower than the inflation rate but higher than interest rates