Property Price Outlook - Summer 2011
As ever in recent years, working out what is going to happen to property prices over the short term is very tricky. The days of just assuming prices are going up, up and up are long gone.So what of the current moment in time? The average year on year change in house prices for the last year seem to indicate that overall there has been a a very modest increase overall, beating the standstill in 2010.
The micro-picture is of course more subtle: there are some areas where growth has been relatively strong in house prices and the market has held up well, in the always-desirable areas, whilst others have of course been hit a lot harder, particularly areas that were seen as overpriced and have come down to earth with a bang. If you own a property, there are a huge range of services you might require, from double glazing to paving, driveways and more.
Particularly in London, property prices are now at an all-time high and in some Southern counties prices have held up well too. There may be something of a North/South divide developing in the figures.
So if the current climate is one of stability or a gentle increase, but nothing much to write home about, what of the future?
This is where expert opinion is divided, and no-one really knows. However overall the picture from the pundits is quite gloomy. For many, all that they can see is a house price drop that is of significant percentages.
Some experts think that the rest of the year will be pretty miserable for house prices, and then 2012 will be even worse. This is based on the idea that there will be higher taxes, more unemployment, spending cuts and possibly raised interest rates all putting increased pressure on property prices - together with the fact the price-to-earnings ratio for property is still well above historic levels.
So there are many out there who expect the price gains so far this year to be wiped out by the end of the year, making it flat overall, and then significant falls - possibly up to around 10% overall - in 2012.
