The Housing Market in 2012
The property in the United Kingdom market faces another difficult time over the next year. While no mortgage experts are predicting major falls, the general concensus it that house prices will dip slightly.
That being said, house price forecasts can be hit and miss, If people could really tell the future, they wouldn’t be wasting their time predicting house prices
The housing market is really depending on the low interest rates at the minute. If interest rates in the UK remain low, they will keep the forced sellers from the estate agents’ shops.
So everyone else is forecasting things, what about Freedebtadvice-uk.com forcast? We think that Northern areas and the Midlands may be hit hard. It is weel known that property in these areas is far more affordable although potential buyers are put off buy the fact that their jobs may be unsecure and on top of this many cannot afford the big deposits that the lenders now demand. London and the South East should do better than the rest of the UK, in these areas some popular areas have seen housing prices rise beyond what the majority of people’s can afford. As we said before, it’s a guessing game and no “expert” can truly predict what will happen in 2012.
In regards to the next 5 years housing prices, the CEBR have predicted that they will rise by 15 per cent due to a shortage of homes. We don’t know what to make of these figures as If house in the UK did rise 15% over five years this would equate to an average of 2.8 per cent per year. Those figures seem far off at the moment.
Estate agents still report a struggle between buyers and sellers. It’s pretty simple; the sellers are reluctant to lower their asking prices 
and the buyers do not want to pay over the odds in an unstable market.
Home sellers must either to lower their expectations or have a desirable property, if they want to make a sale. So properties that don’t fall into the “desirable” category are sitting on the shelves due to sellers not lowering their prices, and with the current low interest rates, there are very few people who are being forced to sell their homes.
Lenders in the UK have made it harder for people to take out interest-only mortages. This has actually helped prop up the property market. This reduction in credit, will exert downward pressure on the UK housing prices.
Another problem that is hitting the housing market is the Euro-zone debt crisis. Many banks are strapped for cash and can simply not afford to lend it to anyone who poses any type of potential lending risk.
As the UK tries to balance its books, Government cuts will also come into affect. These cuts will result in higher taxes and public sector job losses.
Time for some positive news I think…
If you have a big deposit of 25% or more, Mortgage rates are looking very good. Even rates for those people with a 10 or 15% deposit are looking on the up. If lenders approve these mortgage applications, this could deliver many potential buyers.
So, the question remains should you buy a house on 2012? . Sorry guys, there’s no “yes or no” answer to this one. However your decision should be based on how long you plan to own the property and most importantly whether you can really afford it the monthly repayments if interest rates rise in the future.
If you are buying a property as an investment we would err on the side of caution. Confidence may well return in the new few years, but if things take a turn for the worst, property prices in the UK could fall by 10% over the in the next 24 months.
