Savill's the upmarket estate agent is forecasting a year-end rise in house prices of 4% for 2009. This follows a fall of 8% in 2008.
The overall picture is very patchy, with the south generally outperforming the north. The bad news is that Savill's is forecasting a 6.6% fall in 2010. Why would anybody buy a house now if its going to be substantially cheaper in 12 months time?
One factor driving current demand is cheaper mortgages. With base rates still at 0.5% the mortgage lenders are making tidy margins. A rise in base rates is factored into most fixed rates. But there's still a wider margin than in previous years.
Living in Ashford, Kent the local housing market has been distorted by the arrival of the high speed train service to London. The market for new homes in Kent has been deflated for the past 18 months. So buyers are straining to access the housing stock. A neighbour recently put their house in the market for £75,000 more than they paid for it 2 years ago. It seems the house is now sold subject to contract. So maybe Ashford is performing better than other areas.
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