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The latest house price news, predictions and market reports, analysed by This is Money's property expert Simon Lambert
The market outlook

Property ladder: Most would be first-time buyers find it very tough to clamber on
The North South gap has become a gulf. London remains the only region where house prices are rising in England and Wales annually, according to the Land Registry.The July House Price Index from the Land Registry saw house values in London increase 1.9 per cent monthly and 1.3 per cent year-on-year, with the average property fetching £346,416.In the North East the average property price is less than a third of a London home at £101,143, with an 8.8 per cent drop since July 2010.And a gloomy outlook for those aspiring to home ownership has been laid out by the he National Housing Federation.It predicts home ownership in England will slump to just 63.8 per cent over the next decade, the lowest level since the mid-1980s. Huge deposits, combined with still relatively high house prices and strict lending criteria will cause this, according to the report.RICS member estate agents have reported average sales falling to their lowest level for two years.RICS said that its estate agent members managed to sell just 14.2 properties on average over the past three months. The long-run average for sales per agent is 26.3.House prices are now up 4.7 per cent since the start of the year, after inching 0.2 per cent higher in July, but property transactions have slipped to their lowest level in two years, says Nationwide.The building society said that the average house price rose to £168,731 in the month - up more than £7,000 on January's figure of £161,211.But just 204,000 property transactions were recorded in the three months to June, says Nationwide, according to HMRC figures.

Property outlook: What next for prices?
A stand-off between buyers and sellersEstate agents have reported a stand-off between sellers and buyers, with the former reluctant to cut prices and the latter unwilling to pay over the odds. Reluctant to turn down new instructions, estate agents are taking on properties that are then sitting unsold until sellers start cutting prices.That means that plenty of properties are now seeing price reductions and even in London and the South East it has become a buyers' market.Miles Shipside, of Rightmove, said: 'High levels of unsold stock and record asking prices cannot remain happy bedfellows for long, so we expect to see this romp away from reality to reverse itself in the second half of the year as the over-supply of property and under-supply of mortgages reassert themselves and exert downwards price pressure. This could be good news for buyers who have been sitting on the sidelines.' The forecastsOverall forecasts for the market are gloomy. Most agents suggest the balance has now tipped to deliver a buyers' market and RICS' July report showed 22% more members reporting falling than rising prices - the lowest reading this year.House prices will fall 10.5 per cent in real terms over the next five years, as inflation outstrips their rise, according to a NIESR forecast. It has prices to ease 4.5 per cent in real terms in 2011 and then 'by an average of 1½ per cent per annum in the subsequent four years.'
This pattern could see house prices post small nominal rises, but the economic forecasters see these as falling behind RPI inflation. The silver lining to this is that if wages rise over this period, property could become more affordable without more homeowners falling into negative equity.



Its downbeat outlook is not a patch on the gloomy forecast from investment consultancy CheckRisk, which suggests a perfect storm could send house prices down 20 per cent this year.


ROUND-UP: LATEST HOUSE PRICES INDICES 











Index
Most recent
Average House Price
Monthly change
Annual Change
Link to report
Peak






Halifax
Jul 11
£163,981
+1.3%
-2.6%
Full report
£199,612 (Aug 07)


Nationwide
Jul 11
£168,731
+0.2%
-0.4%Full report
£186,044 (Oct 07)


Land Registry
Jun 11
£163,049
+1.3%
-2.1%
Full report
£184,493 (Jan 08)


Hometrack
Jul 11
n/a
-0.1%
-3.7%
Full report
n/a


Rightmove (asking prices)
 Aug 11
£231,543
-0.3%
+2.1%
Full report
£241,642 (Oct 07)


Department of Communities
Jun 11
£204,981
-0.3%
-2.0%
Full report
£220,291 (Oct 07)


LSL Acadametrics (formerly FT)
Jul 11
£217,300
-0.1%
-2.6%
Full report
£231,804(Feb 08)


Expert views: What next for house prices? The NIESR says house prices will fall 10.5 per cent in real terms over five years, down 4.5 per cent this year and 1.5 per cent in each subsequent year.Rightmove says asking prices will slip in 2011 - predicting a 5 per cent fall over the yearHoward Archer, chief UK economist at analysts IHS Global Insight, suggests prices will be 10 per cent lower than their mid 2010 levels by the end of 2011RICS forecasts a 2 per cent fall in house prices in 2011, but says property will not dip by more than 5 per centHalifax and Nationwide predict prices to be flat in 2011Hometrack forecasts a 2 per cent decline in 2011



The headwinds facing the market
The big potential stumbling blocks for the property market.

Interest-only mortgage crackdownLenders face a mortgage crunch
Austerity measures

Lenders have made it much tougher to take out cheap interest-only loans, which have helped prop up the property market. This is a reduction in credit and will exert downward pressure on prices. 
The second problem is that lenders are still cash-strapped. This year is a crunch year for lenders in terms of refinancing their debts. For example, the Bank of England's Special Liquidity Scheme is currently being unwound, with lenders refinancing their emergency funding by January 2012. This is progressing better than many expected and some banks and building societies are keen to lend, yet this is nowhere near normal levels of business and money is tight and reserved for only the best borrowers.
Government cuts will also start to filter through soon, as the UK tries to balance the books. That will mean public sector job losses, higher taxes and a dip in confidence. The cost of moving is also sky-high. Those buying family homes in areas where a relatively modest property of this kind costs more than £250,000 face a stamp duty bill of at least £7,500, add estate agent and solicitors' fees and moving can set a normal family back £15,000 or more, without even having to find the extra cash for a 25% deposit on a more expensive home.
Should you buy a home?

For many areas confidence never returned after prices started falling at the end of 2007, but for in-demand locations, especially in the South East and London, it was back to the boom from mid-2009 onwards.

But that looks to have ended, although some hopeful sellers are still demanding 2007 prices.

The flipside to the lack of confidence and falling prices is that on the surface mortgages continue to get slightly easier to secure and borrowed money at the moment is cheap by historic standards. So if you can get a good deal and a good rate, now is a good time to buy provided you accept prices may fall in the short term.


Mortgage rates for those with a 25% deposit look very good, while rates for those with 15 per cent and 10 per cent deposits are improving. If lenders are willing to let borrowers through their tough lending criteria, this could deliver buyers for whom property looks affordable if prices ease back.

The questions are whether they want to take the plunge while the effect of spending cuts filtering through the economy and how on the other side of the fence lenders will be hit by tougher regulation and their own lack of confidence.

So should you buy? The answer should be based on how long you plan to own the property (whether as a home or investment), whether it personally suits you and most importantly whether you can afford it.

Buyers preparing to take the plunge should bear these factors in mind and ensure they can take the hit of future interest rate rises and a fall in house prices.

Confidence may return and the property market rise from here, but if things take a turn for the worst it is also not unrealistic to see prices falling by 10% over the next year or two.

Caveat emptor (buyer beware) and make sure you'd be happy in your new home, because you could be stuck there in five years' time.

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