House prices rocket by over 90%

Almost any investment (that is still viable anyway) will have increased over 10 or 25 years. Piping up with headlines like this only serves to mislead. Gold has risen 350%+ over the same period - so what? The point is that how markets have performed in the past serves little purpose as to how they may perform in the future. There will be some similarities of course, but the number of possible variables voids the concept that the past will repeat itself. If you take the gold markets stats year by year, (a similar trend will doubtlessly emerge with property in time) you will see that it isn't all sweetness and light. UK house prices do still have further to fall, but not to the extent imagined by most. In an ideal world of course houses should be affordable for everyone and so on, unfortunately though this is not, and never really has been the case. While sellers are free to ask whatever they like for a property, and buyers can similarly pick up bargains or overpay, the housing market will be a slow moving one. What isn't helping however, are fancy mortgages for first time buyers that serve no purpose other than to generate more negative equity for those that can least afford it.

People keep mentioning about a housing crash. This will not happen unless we have a financial meltdown, such as horrific inflation, or a plague that wipes out half our population. The simple fact is that if the value of our homes suddenly dropped by 50% (back to the 2000-2003) period, more people would be able to afford to buy (meaning more people could raise a mortgage with a bonafide lender), but this sudden surge in buyers in a market of restricted resources (the homes available to buy) would push the prices back up again. The housing market is very much like an auction. If you offer a lot and there is hardly any interest, you'll probably be lucky to reach the reserve, but if you offer a lot that has a wide interest, you'll exceed the reserve twofold, or even more. The same principle would apply to someone selling their home, in that if interest is great, they'll let the prospective purchasers battle it out to see who can raise the highest amount. The Scottish system uses the, 'Offers in excess of...', system to set a base price and allows people to makes offers in excess of this price, and allows the vendor to decide who's offer to accept (the highest is not always the best, as some offers come from cash buyers with immediate funds). This system is starting to materialise in England now, with some success in some areas (although I have seen a property that was sold for £5,000 below the stated price). Traditionally, in England, you marketed your house with an agent or three, and tended to accept the first genuine offer made, which would then result in your property being withdrawn from the market. There is no safety until contracts have been exchanged, which could take many months, or even years. Introducing the Scottish system to England would have a differing approach, whereby until an offer have been accepted, anyone could come in and offer more, or make a more solid offer (cash on the hip). The beauty of the Scottish system is that it allows you to set a price, then see just how much enthusiam your propert generates. You'll probably get a more realistic appraisal of your property this way, rather than setting the price at the absolute highest you think it might achieve, then spending months knocking thousands off the list price to generate interest. I should point out that even in the Recession, Estate Agents are still playing their little tricks. A property I wanted to look at was bought for bugger all, then sold on for £20,000 more than was paid for it, four weeks later. I know there was something suspicious about the sale, because the house was vacant possession, and I was obstructed at every opportunity from viewing the property. When it was sold, and recorded at Land Registry, it went for quite a bit less than the listed price. A month later, it was sold again, by the same Estate Agent who sold it the first time. When I inquired at the Agency about this property, I was buffed off. With Estate Agents thinking of new and exciting ways of fleecing the general public, we need the government to think of a system that allows more transparency in how agents market and sell our homes. I know, for a fact, that an offer on my old home was NOT passed on to me, even though it is a legal requirement. Maybe making it a law that an offer made should be done in duplicate, with one being given to the agent, and the other direct to the vendor (or vendor's agent, such as family member or someone with power of attourney). The agents hold too much power, and this should be removed, by giving back the homeowner some responsibility. After all, the Agents job is simply to introduce buyers (advertising portal) and nothing more. Why can't an offer be made direct to the vendor? Anyway, that's enough of my rant. House prices may drop, but not by any significant margin, due to supply and demand, and the greed of homeowners and Agents alike will always ensure that the prices of properties will always be maintained at an artifically high rate. I can't see any change soon, unless a Government grabs the housing market by the balls and does a radical shakeup. If left to the Agents who sell our properties, nothing will change.

Unfortunately the house market is not a free market - supply is restricted, not by the amount of land but the amount of planning permission, It is utterly wrong to think that high and increasing house prices are good for the economy. They suck up more and more of income in interest payments to those global banks we all love to hate. The unfortunate thing for us is that the banks have a captive market. We all need somewhere to live and someone has to own the properties we live in. To free ourselves from debt, leaving us with more disposable income and more money that can find its way to the treasury to fix our public finances, we [b]need [/b]house prices to come down, although it would be better if this was managed so that they didn't crash. Free up more land for building though planning permission changes. This reduces the cost of land and therefore the cost of property. The idea that there isn't enough land is a false one, even in the crowded south east there is plenty. Free the land, free the people.