Jun
21
Expect a Fall In House Prices
Filed Under Finance
Rightmove have painted a bit of a gloomy picture about what will happen to house prices for the rest of this year. They are predicting a fall in house values, meaning that the property market will be pretty flat overall this year.
We keep hearing different views about the health of the house market. Whilst some are predicting that house prices will increase after the World Cup (though I doubt that Englands’ performance will instigate that wave of euphoria), others are painting a more cautious picture.
Rightmove have come down on the side of thinking that we have seen the peak of house prices this year, and its downhill from here. They are blaming tomorrows fierce budget, in particular possible increases with capital gains tax, on a predicted slow down in house price inflation.
According to Miles Shipside, the commercial director of Rightmove, trouble for house sellers will come in threes – the abolition of HIPs – which is tempting more sellers into the market by lowering the cost of selling, the poor availability of mortgages, and now the fear of CGT tax rises which will reduce the attractiveness of investing in property.
“Together, these factors are likely to put an end to this year’s recovery in house prices. It is an unfortunate concatenation of events that disrupts what was sort of passing as normal service, where investor appetite provided an uneasy balance to the first-time-buyer-starved market.”, Mr Shipside says.
Personally I think Rightmove are correct in predicting a slow down in house price hikes. They are in an excellent position to see what is happening across the whole of the house market. They are currently seeing more sellers and that these people are being less aggressive with their asking prices.
Rightmove are also seeing less demand from buyers so power is tipping in favour of purchasers who know that they can drive a hard bargain, as long as they have a mortgage in place, which is no guarantee during this mortgage “famine”
If I was thinking about investing in property at the moment (which I’m not, by the way), I would sit on my hands and watch the fallout from tomorrows budget. If Rightmove are correct then you’ll be able to buy property more cheaply in the months to come.
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