What has been said above seems to reflect what could happen in the market if certain factors take place. In the early 1990's crash prices fell by 30% on average. If prices were to fall by say 10% there would be a que of buyers wanting to buy the property because although we have seen huge rises the current price is still affordable at an income multiple of up to 4 times income. Also if prices fell there would be buyer ready to buy rental properties as the yeilds would become alot better. As people sell they need to live somewhere so they will rent - demand for rentals will increase and rental prices will stabilise - making it more appealing for wealthier landlords to increase their portfolios. So the rich will get richer ... off the backs of the poor.(posted 7979 days ago)I am not a rich landlord but to protect my pension and for my kids future I would buy a few properties if prices fell.
So although I really do wish to see prices fall the scope for the fall in my opinion is very limited.
In addition there is a great pressure on the government to subsidise affordable housing this will make the demand for housing stronger and will push prices further.
Brown could raise rates and probably will but then by how much if will need to get closer to joining the euro....
Manufacturing in the North is really struggling so a massive rates rise will harm more working class people by increasing the companies cost of doing business and causing job cuts. The harm caused by an overheating property market does not cause thousands of job cuts. Hmm, which shall we choose....
In my opinion there are really onlt two options:
1. Increase the taxes on the income generated from a second, third etc property (and halving the interest allowed as tax deductible)
2. Increase the amount of houses built. Use greenbelt land for building. I heard that only 15% of britain has any kind of development on it - well lets increase it to 20%. That way we will see a sustainable property market where families can prosper rather than both parents having to work. I personally would rather habve my kids being able to afford to live rather than have a huge open feild in the middle of no where.
Don't get me wrong, I do want to keep the beautiful countryside but humand have to live too.
Those against the developement of more greenfield sites probably have huge homes in the the countryside. They are also the MP's who will be agaist the use of the land.
Anyone out there interested in forming a party/group to action for the development of more greenfeild sites?
More housing is the only way out of the misery of the boom and bust property cycles.
I wouls love to hear your thoughts...