Are house prices falling, stabilising or increasing?

It has been reported by various sources as of late that house prices are falling, stabilising and increasing, but who is right?

PricewaterhouseCoopers (PwC’s) have said that they predict that house prices are likely to continue to fall well into 2010. The Royal Institution of Chartered Surveyors (RICS) have a mixed view with some of their surveyors predicting that house prices would start to increase, but others saying that the house prices will continue to fall. The report from the Department of Communities and Local Government (DCLG) has reported that house prices are continuing to fall, but at a much slower rate than before. If that wasn’t enough predictions, the Halifax estate agents have said that there was an increase in property prices. For all those people looking to achieve a quick sale of their property because they are trying to stop repossession or just trying to move home, all of these predictions are not helping!

There has been some stabilisation in the market place recently, but certainly not enough to make a significant change or stabilise houses prices. The banks and building societies are still lending at the moment but only to people who have a substantial deposit i.e. 20-25%, giving the bank security. This security gives them enough equity should the mortgagee not pay their mortgage and then have to repossess the property. For those who are in the position of having mortgage arrears or are in a position of trying to stop repossession already, they are some options out there.

PwC’s has also made a comment that ‘despite some recent reports of rises, we are not out of the woods yet and buyers should take a long-term rather than a short term-view’. They have also warned that even if the economy has a strong growth for 5 years we would still not reach the houses prices at the beginning of 2008. This is obviously not great news for those who are in negative equity and are scraping through trying to stop repossession.

We would say that the property market has shown some signs of stabilisation due to the lack of property been but on the market for sale, but property prices are going to continue to fall. This is mainly because of property owners are trying to rent their properties out, are in mortgage arrears, trying to stop repossession or are in negative equity. This is due not to house prices increasing or mortgage lenders being more flexible. We feel that property prices are falling at a slower rate this is why there is some speculation by all the property professionals, but nothing as of yet has slowed the amount of people trying to stop repossession or actually being repossessed, not to mention the amount of people that are being made redundant forcing them into this position.