How much will your property be worth by the end of this year?
Like many homeowners there is a good chance that you are fretting over how far the value of your property is likely to fall over the course of this year, with house prices having already dropped by over 15 percent on an annual basis compared to a year ago. Many homeowners have seen their property values and the equity in their homes plummet in the space of a year, wiping thousands of pounds or more off their property value.
Understandably, with their equity levels having already been slashed dramatically, many are worried about what will happen with property prices over the course of this year. However, in such a volatile environment it is difficult for anyone to predict how property prices will fare, to the point where some major lenders and even the Council of Mortgage Lenders itself has decided not to make any forecast on house prices at present due to the difficulties relating to this.
However, the general opinion amongst most industry experts and groups seems to be that homeowners are in for another rocky year, with house prices expected to fall further as the year goes on. In fact, some officials have stated that house prices are likely to suffer a total fall of around 35 percent before the market starts to show any signs of recovery, which means for many homeowners there could be real problems ahead, including the very real threat of negative equity, which could affect many more recent property purchasers.
One industry official stated: ‘If you look at what happened in the early Nineties it is arguable that like then we had had a big boom, but this time we’ve also got a credit crunch and a global recession on top. Property was massively overvalued. It was always the elephant in the room that nobody would admit to.’
Another reckoned that there could be an improvement over the course of this year, although it would not be a dramatic one. He stated: : ‘We are certainly not going to return to the boom times in the near future but we should see a modest increase in property sales levels, mortgage offers and indeed general interest in property in 2009. However, we are unlikely to see a return to a healthy level of activity in the housing market until 2010, or even 2011.’
Another report has shown that the weakening of sterling has resulted in many Europeans being attracted to the UK with an interest in property. One official said: ‘European buyers, especially Italians, are piling in to London’s property market and supporting prices locally. As far as they’re concerned, there’s never been a better time to buy – they’re snapping up the bargains. While the British economy is faltering, the euro is getting stronger and this is the result. This week we’ve seen two Italian couples competing over a £700,000 property in Battersea.’
