City AM Reports Years of Gloom for Housing Market
Analysts at popular City Newspaper, City AM predict years of Gloom…. On average (London being the exception) house prices are down 25% however this is more like 30% in real terms when factoring in inflation.
The average house now costs around 4.45 times average annual income which is far lower than the peak of 5.81 in July 2007, but still above the post 1983 average of 4 times.
Another negative article in today’s Daily Mail reports that “Buyers and sellers are locked in a stand-off”. Surprisingly sellers have been far too optimistic and actually increased their asking prices by an average 1.7% or £4,032 during April. With the threat or an immanent Interest Rate hike just around the corner buyers are cautiously waiting to see what happens, it’s no surprise that estate agents experienced their biggest jump since the start of the recession for unsold properties, only last month. If you are planning on selling through Auction then you may have to come face to face with some very cautious buyers who are looking for a bargain. At the same time if you are looking to sell and move abroad this year then you may have to seriously re-consider what the fair market value for home really is.
Unfortunately, the experts are predicting a long hard slog, especially if rates rise. Michael Saunders of Citigroup, believes that prices are likely to remain depressed for a long time to come, as they did after peaking in 1973 and 1989. House prices did bounce back quickly in the early 1980’s but this was an exception as due to an influx in available credit. As mentioned previously without the lenders opening their doors many sellers will be left struggling to sell their home for the foreseeable future.
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