Rightmove: house price optimism on the up

hopefultom said Nickpike For the last 3 years you have been forecasting a 50% drop in property prices; now you say that you" cannot believe the drop in prices just North of Birmingham " Are we to assume from this that prices in that area have fallen by more than 50% ? They have dropped significantly but not 50% as yet. The politicians have been wasting huge sums of money supporting the zombie housing market and have delayed the crash. What will bring down prices to the bottom of the curve is mortgage rates as opposed to Bank of England rates now, as they have now become detached, due to lending criteria for the banks getting tighter as the economic situation worsens. We are seeing some nice detached stuff at 130k which was considerably higher in 2007. We are seeing more and more repossessed houses. Prices will collapse the full 50%, and possibly more now, it is a mathematical certainty, and maybe it's now happening seeing that the politicians have only added to the damage created by previous politicians. The macroeconomic situation is so severe now, there is no way prices can be supported. Look at what's happening in Greece, a lot of which is not being reported. Don't think we are immune.

I can't see the slant in the article. Optimism before was less than a third so it is on the up. Also there was no opinion given - just reporting of one single survey! Our Editor is sitting on the fence again and asking us. Normal journalists manage opinions on much less basis. So far as UK is concerned, we have a huge shortfall of housing in the South East which is helping prices to nudge up a bit. Elsewhere there is an over-supply so prices are falling. What we need are government policies to correct the imbalance. Directing immigration away from the South East might help. Currently most of them come to the SE. Expect prices to fall again when interest rates eventually rise. Mortgages are currently much more affordable due to low interest rates. However, the shortage in the SE will help to keep those prices high. Mike

"Similar trends are obvious in the USA" Not a good example - USA has a large housing surplus - the politicians have been talking of schemes for pulling houses down to help balance supply-demand. Here we are on a finite Island with next to no supply, and restricted building options since our infrastructure can barely support the required additional new housing to meet the rising demand. We have the previous government to thank for their lack of a population policy and numerous landlord MPs.