Ten house price predictions for 2009

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House prices fell by about 15 per cent in 2008, according to Halifax. In a clear sign of how turbulent the property market has become, two major lenders – Halifax and Nationwide – as well as their trade body, the Council of Mortgage Lenders, have refused to issue their predictions for how far house prices will fall in 2009.

As Britain falls further into a recession, with at least 600,000 people expected to lose their jobs in 2009, the economic outlook continues to be bleak. However, with interest rates likely to hit 1 per cent or even lower, and with the recapitalisation of banks expected to shore up the mortgage market, some experts say house prices may finally bottom out by the end of 2009.

Here are ten predictions of how much further house prices will fall next year.

1. Royal Institute of Chartered Surveyors – 10 to 15 per cent

A spokesman for RICS, the trade body, said: “It would be something of an understatement to say that economic events are moving quickly. Any outlook for the UK housing market inevitably carries a greater risk than would typically be the case.”

2. Lloyds TSB – 10 per cent

Lloyds TSB Chairman Victor Blank told the BBC before Christmas: “People are going to be feeling concerned, uncomfortable, some in dire straits. It’s going to be a hard start to the year. It’s very hard to predict but I suspect that there’s up to 10 per cent further to go.”

3. Propertyfinder.com – 12 per cent

Nicholas Leeming of Propertyfinder.com, the property website, said: “The biggest price reductions will occur in the first half of the year.  In 2009 the market will be dominated by those buyers who most rely on securing a bargain – namely professional buy-to-let investors and first time buyers.”

4. Savills – 11 per cent

Melanie Bien of Savills, the mortgage broker, said: “We are predicting another 11 per cent fall on a national basis in 2009, following the 14 per cent drop this year, giving a total fall of 25 per cent from the peak in 2007 to trough.”

5. Assetz – 5 per cent

Stuart Law of Assetz, the property investment company, said: “I expect house prices to continue falling modestly in the first half of 2009, but that some kind of bottom will form over the summer period. Falls for the year as a whole could in fact range from between zero and 10 per cent, depending on how events play out.”

6. Armstrong Davis – 20 per cent

Jonathan Davis of Armstrong Davis, the chartered financial planner, said: “Estate agents who say that house prices will recover soon are jokers. Prices will fall by about 20 per cent in 2009 and will continue to fall in 2010 and 2011. I do not expect the market to bottom out until 2012.”

7. Rightmove.co.uk – 10 per cent

A spokesman for Rightmove.co.uk, the property website, said: “We predict the latter half of 2009 will see the market bottom out, albeit with prices then bumping along the bottom for at least a year. Prospective buyers unable or unwilling to proceed in 2009 are likely to miss out on the best quality buys as current low volume of sales are unsustainable.”

8. Cluttons – 10 per cent

Richard Cotton of Cluttons, the London estate agent, said: “Central London prices will bottom out at 25 to 30 per cent below 2007’s peak prices in early 2010.

“There are plenty of buyers in London who have built up considerable equity in their homes over the last ten years, who are preparing to take advantage of price falls on more expensive properties and upsize. Those in temporary rental accommodation are also preparing to re-enter the sales market as soon as prices begin to plateau.”

9. SmartNewHomes.com - 5 per cent

David Bexon of SmartNewHomes.com, the new homes website, said: “While I predict some light at the end of the tunnel in 2009, any kind of recovery for the market will be modest at best, and depends heavily on the banks’ willingness to open up the mortgage market and passing on interest rate cuts.”

10. The British public – 8.6 per cent

According to the Building Society Association's property price survey, the public’s average prediction for 2009 was an 8.6 per cent fall. It shows pessimism is growing, since the survey found that the average prediction in June was a fall of just 7.1 per cent.

By Lauren Thompson

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Comments

[B J Deller]

Wally I agree with you and I have the life experince to know. Many mortgagees will be (already have) losing their jobs and there will be thousands of distressed sales, sad but people were silly enough to pay inflated asking prices and the greedy banks broke their own rules to lend the cash. The bubble has burst and many who bought in the last five years will "bleed". "We lave learnt lessons" as GB et al have said recently, but has the electorate learnt by not voting for Labour for a few decades?

[Satya]

The only thing I have been sure of over the last 3/4/5/6 years has been that the housing market is out of control. It is my belief that media reporting especially has encouraged folk to;

'BUY NOW, OTHERWISE YOU WILL BE PRICED OUT OF THE MARKET WHEN THE HOUSE YOU DESIRE WILL COST 1 MILLION POUNDS IN ONLY A FEW YEARS, YES, 1 MILLION POUNDS!'

What complete and utter nonsense. I do not like the word sheep, but it is a sad fact that folk do herd and for some reason choose to believe, frequently without question, what is written in a newspaper,any newspaper. At this moment in time it is unsafe to rely on any prediction as to when the housing market may stabilise.Stabilise..

The Times article is irritating. Those with a vested interest in the market cannot be relied upon to give a wholly objective view on further percentage fall in values.I loose respect for the Times a little more each time I see the Times report in this way.

[Jack]

I just think anyone who wishes to forecast a rapid rebound should look at two charts; rental yields for the last 30yrs, and the chart on the HBOS website of earnings to house prices and then take a long pause and think again, one can buy stocks at a dividend yield less than 10y treasury yields!

[Rikki-Tikki-Tavi]

Interesting to read these predictions. What would be more interesting would be to read the similar predictions made at the start of 2007, assuming that such were made at this time. If any of these reports were to warn of a 25% drop over the next two years then I would be happy to take that person's report seriously now. I have little time for crystal ball gazing; if it were possible to predict then it could be argued we'd never get into a mess in the first place. The expert I trust most is the one who is not afraid to say 'I don't know'.

[Francis]

I find it interesting amidst the doom and gloom a flat on my London street sold (oct 10, 2008 - height of negative news) for I think a record price. I think demand and quality are the key issues. e.g. If you bought a new development in a rough area of Manchester... you will be waiting a long time for recovery... these figures are a big messy average and scare lots of people.

[Bob Greenaway]

Pure guess work from the herd who sell themselves as experts.The drift will continue until some encouraging figures emerge from USA,no predictions when this will be,but I can guarantee that almost overnight prices will rocket.A combination of supply & demand,cheap money & devalued sterling mean this is inevitable.
Just be ready for it.

[Wally]

I see no reason to be optimistic about housing prices, especially in London and the South East (SE). Firstly, rightly or wrongly, banks apparently aren't lending to each other so don't expect them to provide capital to homebuyers on commercial terms. The price declines will only drive LTV lower in fact. Secondly, and notably in the SE, key industries are scalling down and the human tragedy of unemployment is now and will continue to be felt. Let's see: banking - down big in 2009, private equity - down in 2009, hedge fund alley - certainly not up, profesional services - down (see Clifford Chance news of late), retailers - down. Continentials and Americans returning home too increasingly.

Can someone more knowledge than me explain with the lack of bank lending to support the housing market, discouraging employment trends in the SE, high street bankruptcies each week and consumer confidence down, why shoudln't quality home prices sink 35% by mid 2010?

Winter chill in the air, indeed good friends.

[Nous MDC]

The current fashion is for predicting doom in the housing market, it's not all doom. Hold on to your home if you can and you will over the longer term (5 years or so) not lose out. House prices were artificially inflated by...the availability of interest only mortgages (and no obligation to put in place a capital repayment plan), huge loan to income multiples, liberal lending policies (e.g. self certification), extended periods of lending and most significantly easy availability of cash to lenders. The lenders entered a market they perceived to be guilt edged. The artificial elements were then enhanced by the perception that the housing market was a unique one-way investment. A myth probably promoted in large part by all the new entrants to the lending market. Prior to the belief taking hold that buying property was a like a guaranteed win at the Casino the majority of people who bought a house viewed it as a more efficient way of renting a home and long term they would not have to pay rent.
As to how far property prices will fall this year the overall average will depend to a large degree on three key factors: 1. How much of the very heavily over priced stuff has already been discounted and sold. 2. How many people can afford to sell at a discount and... 3. How many folk are sadly repossessed.
So really no one knows how far they will fall, only that they will fall for an extended period. They will fall because the buying market has to catch up and adjust to the new and now highly restricted lending terms. Once the buying market adjusts to the new lending terms, possibly 12 months or so from now prices will stabilise and gradually begin to recover. So hang to your home if you can, eventually the price you paid will recover.

[richard]

Hi all

House'S will drop more if the banks do not start lending so we should stop putting our money in them and see what happens

[Which Way Home]

I am currently finalising the WhichWayHome.co.uk outlook for 2009. My predictions for 2008 proved pretty close to the mark (40% stock market crash, interest rates down towards zero, gold to rally in GBP terms).

I see house prices in the UK bottoming at least 50% from their peak. We are already 18% below last October's peak and I see a further 20-25% fall in 2009.

The key theme for 2009 will be ongoing bailouts and financial stimuli which continue to inflate the money supply. While officials and commentators focus on deflation, readers would be wise to position themselves for the coming inflationary vortex.

[Charlotte Docking]

Carl, Paul's 'PS' made me smile too. Some people are a little too quick to preach rather than practise I think.

But he is right. Hey for about five minutes, I actually forgot about the state of the housing market in order to lament the state of our education system.

PS. it is not good form to use an ampersand in place of 'and' except when it forms part of a company name.

[Carl]

Brilliant Paul, just brilliant. You've made my day. I'll be "writing" what I "read" from now on.

>>>>

[Tom Franklin]

the stuff people are saying is terrible. Prices dropped by another 50% that would mean my 1200sqf duplex 2 bed appartment in Battersea would be worth 225 000 from the 450 000 it was valued at 2 years ago.
NICK 7 JAN 2009 10:42:01

So it's terrible for you. Doesn't make it wrong, or wrong to say it. I can't tell from your post if you bought 2 years ago, but you care about the value 2 years ago. So what? If you bought a property in the last 3 years you were taking a massive gamble. I wouldn't have touched property with a bargepole given the obvious risks that such a purchase would have entailed. But perhaps people like you did, you chose to take that risk for the benefits you reaped, which others such as I didn't. What's the issue? If you didn't buy 2 years ago and you merely are miffed about the drop in value, well that's something you have to work out in your mind and come to terms with - such valuations are meaningless.

I guess I don't understand what you're trying to say. That it's terrible that prices are going to crash - well, I'd beg to differ. It's personally terrible for you because you - well that's the financial decision and risk you made. If the market had gone the other way you'd not be complaining, it was your risk/reward decision and you must surely must have calculated that if there was a 30-40% drop in prices you'd be OK still, as I trust every purchaser did. Or it's terrible for people to say things you don't want to happen? That's just silly.

[Paul]

Based on historical housing data, we're still way above trend which would indicate a fall of circa-17% in 2009 followed by further falls of 8% in 2010 and 3% in 2011. By 2012 prices will have stopped falling (unemployment will be dominating the news headlines by then), but will remain flat for a couple of years before starting to increase, albeit very slowly at first, from mid-2013.

Some people here have grasped the idea that house price decreases are not all bad; a society which pats itself on the back for failing to provide housing at 'reasonable' prices (i.e. income multiples of between 2.5x and 3.5x average salaries) for younger generations is unquestionably morally bankrupting our country. Unfortunately, it's not just our country which 'owns' this problem - major house price increases have generally been a global problem over the past few years, from New York to Sydney to Auckland to Bristol.

To Ian James - I am certainly not a 'doom-monger'. I prefer to see myself as a 'reality-check expert'.

Anyway, I blame Kirsty Allsop.

P.S. Some of the spelling & grammar in quite a number of these posts is absolutely awful. There are a number of individuals here who make excellent arguments but unfortunately then make themselves appear completely uneducated. Please people, write what you read before hitting the [Post] button.

[MacK]

Laura Roberts -- I would agree with the broad thrust of what you said. However, the key number is household income. Average UK household income is £33,492 (as of 2007 and I doubt it rose much in 2008.) Current prices are an average of £153,048. The medium and long run average property price in large economies is 4.5 times average household income and this price equates to 4.56 times income (assuming incomes don't drop.) So we are approaching the average medium/long run price.

However, this is the center-line price. Property price crashes usually do not start to see a recovery before the average property price is significantly below 4.5 times income -- usually somewhere around about 2.8-3.5 times income -- and typically closer to 3 (declines usually start at about 5.5-6.) This would imply that prices have yet further to fall. Even another 15% will only get them to 3.9 times income. So I would not expect to see a recovery before the average property price is a little over £100,000, which means at least another 1/3 off prices or so.

My own guess is that now that market sentiment accepts that prices are falling, they will fall faster in 2009 -- perhaps as much as 20%. This would mean that a further 10% reduction in the first half of 2010 would actually put prices at a level from which they would start to recover -- or 16% year on year, 2009/10 would have the same effect.

As for your views of Central London property prices -- plug into the above calculations the average household income numbers: £101,600 for Kensington & Chelsea; £81,425 London & Westminster; and £77,500 for Highgate. These are the 3 richest areas in the UK -- now ask yourself, do their house-prices make any sense at all? Or for that matter their rents (apply a 25% of net-household income to that, 15% post-tax)?

I have been saying since 2002 that UK house-prices were dangerously out of line -- at that point they were over 5 times household income (lower incomes at that point), well overdue for a drop. Only the total idiocy of the banks, the regulators and the public allowed things to keep going up -- as well as the economic correspondents (the polyanna Economics editor of the Times David Smith deserving a particularl mention here.)

By the way, to all of my numbers I would add a caveat -- these numbers are for the most part from economies where tax relief of mortgage interest is available -- in the UK this applies only to landlords. To the extent that they incorporate UK numbers, most of those numbers pre-date the Conservatives abolition of interest relief for homeowners (though the subsidy remained for landlords.) My own view of this is that it means that UK property prices should have settled, long-term, at a lower level than 4.5 times average income -- that has not happened, yet...

[Nick]

Who is saying 50% falls how and where could that happen. I have never made comment before on a blog but the stuff people are saying is terrible. If Prices dropped by another 50% that would mean my 1200sqf duplex 2 bed appartment in Battersea would be worth 225 000 from the 450 000 it was valued at 2 years ago. Simple maths currently rented at 1700 per month on a 5% interest rate interest only morgage would be £973 per month for any investor BTL they would wait round the block for a deal like that at £225 000, as I know i would. I also own a house outside of Manchester and yes them areas need to fall prices as totally over priced but central london 50% I dont think so. Its the press telling everybody the doom and gloom Its about time that we did what you should do when times are tough work harder save more. Not throw money at the problem as the Goverment are doing thats not the way out of a failing business you down size. My view is prices will go 10% more in Central London in the good areas down, Outside of London North of England 30% down average house price £120,000. Slow recovery from there just normal price rises until the pound makes gains then every man and his dog will come back to work here as usual and send rents and prices sky high again. The boom and bust will never end each time just takes a different form. I was and estate agent in the last bust and watched it come out from one year having more property than what you could handle on the market to the next where people were outside waiting for the shop to open to see if anything new had come in and this was 1998 not 2 years ago.

[Ian SISLEY]

It might be the Royal INSTITUTE of British Architects but the RICS (hardly a "trade association" as you so bluntly put it) is in fact The Royal INSTITUTION of Chartered Surveyors; don't ask me why, it just is. Maybe you could get this into your spell checker? from Ian (a member of the RICS)

[Laura Roberts]

Ian James: :"If every strong-willed person in Britain approached this year with a really positive, upbeat attitude, then we will climb out of the downturn."

But Ian, your premise is wrong. You assume collapsing house prices is a downturn. Many of us others see it as a collapse that is needed for variety of economic, social, financial and practical reasons.

A society in which a central London 1-room 1 bed studio costs £400k, over 16 times the national average wage, and elsewhere in the country homes are 6+ x average salary, is screwed up.

Add to that we have a society where one group of people are paying for the social housing of another group, built with bigger space plans and higher minimum design standards than private housing I hasten to point out, who are then permitted to remain in that property infinitum and purchase it at lower than market values if they want, sell it at a higher price and pocket the difference, when we have a so-called "housing shortage" can only be described as morally, economically and politically mentally insane.

I am really positive and upbeat thanks. I look forward to the housing market crashing 50% and this peverse, insane economy going through a much needed recalibration.

[oldasiahand]

House prices are down 16.8 percent? really! Not if you try and sell one today. Bet it's more like 25-30 percent. What about Barratts' city centre flats all sold off at 45 -50 percent discount.

No one can know where th bottom is because the future for the economy, the banks, employment, inflation is so murky. But it's down for this year for sure and probably flat after that for some times. The market was up for 13 years from 1994-2007. A 6-7 years correction period would be normal whilst incomes catch up and the banks begin to operate again.

[Father Ignatius Brown]

Browsing a property search site I came across a very nice house for £320,000. I thought it looked familiar and dug out some old details of properties I looked at 3 years ago before deciding to rent - sure enough, there in the local developers brochure was the same house on sale at £485,000 (and another of the same model in the same village for £499,000 just last January 2008). That's a 35% fall in asking price before negotiations start. And the house is standing empty - the pictures of desolate rooms tell a sorry story of our time.

[Father Ignatius Brown]

Oh and the so called housing shortage is an illusion - most of the shortage refers to predicted long term imbalances - currently there is no shortage - which is why one of the Estate Agent bodies recently reported that rents are falling faster than prices!

[ian james]

Why do the majority of people in Britain want doom and gloom?

If you predict doom and gloom, then thats what you'll get. These clowns purporting to be economic experts who are predicting really bad figures for 2009, 2010, etc. should take a step back and look around them. In reality they are just making bland, sweeping and frankly melodramatic statements, and everyone seems to want to cling on and have a weep about it.

If everyone were to tell themselves "This year things are going to improve, we are on the up ,the Government's strategy is going to work" - then believe me it will.

If every strong-willed person in Britain approached this year with a really positive, upbeat attitude, then we will climb out of the downturn.

But the papers don't want this, because good news doesn't sell papers, gloom and dom does. And the opposition to the government also don't want this, because they can't stand to think that Gordon Brown knows what he is doing and he's right.

You gloom-mongers - and this includes Cameron and his miserable cronies - SHAME ON YOU!! Whyh can't you rally round Gordon and give him some strong support, rather than just negatively sitting there saying "oh, it'll never work".

Thank the Lord that these downbeat pepole with "loser" atrtitudes are NOT running the country, if they were then it would be time to leave the UK for good!

[paul]

slash the 3% stamp duty on property over £250,000 for a year & see if that lights any cigars?

[BILL]

as the old saying goes "economic predictions exist only to make horoscopes appear more credible"

[Scotty]

Good Evening,

After Reading all the so called scarey predictions, guess work & analitical reports supplied above...

Mainly Made by mis informed muppet's with a college swimming certificate or a grudge to bear against their well to do parents, who might I add.. well afford a 500K condo in London, or as previously mentioned....Estate Agents!! well spotted!.

I thought it time I posted a comment....

If we don't start thinking like we are in control of our own economy?. then how do we keep control of our own economy?.

We can't use the american's or the doller exchange as the excuse when their economic downturn was on the cards over a year ago.. judging by the state of their housing price fall.

Estate Agents in the UK, Europe, Asia or America don't tell you that when your your on your two week holiday from work..

Why? You work it out...

The downward trend of the euro was forcasted to bring in line or minimilise our exports to other countries.. This in theory.. should keep trade in the UK.

So,... based on that theory why not keep everything we manufacture or produce in th UK...?

Regards...

[James]

House price expert "Mrs Bloggs" says that the Land Registry figures, which take into account all property sales and therefore are supposedly more accurate than mortgage-based data, aren't as bad as the HaliWide figures - "(LR figures are) less negative than the vested interests".

Oh yeah?

Average UK house price, November 08:

Halifax = £163,605
Nationwide = £158,442

HF/NW average = £161,023

Land Registry = £161,883

I suggest people learn what they are going on about before criticising the "vested interests" and others.

Incidentally, the Land Registry data lags behind HaliWide by at least three months (unlike other indices, when LR posts monthly data it doesn't actually refer to sales in that month). As a consequence one could reasonably claim that the LR figures are MORE negative, not less so. Three months ago the HaliWide average was £169,416......

[Del]

Dylan, you posted an article providing futures trade data from over six months ago, before the global banking crisis and state bail-outs. Even without these events, six months is an absolute age in futures terms.

In other words, you posted completely worthless and misleading information.

Try teling us what the figure is now.

[Henrik Brondum]

It's difficult to predict, especially about the future!

[peter]

At the beginning of the year we had umpteen moronic television programmes telling us to buy any old wreck of an house slap a few coats of paint on it and bingo two months later you,ve made youself £100 grand.and in fairness to them most of us myself included believed them.If the chickens are now coming home to roost we have only got ourselves to blame

[bob]

Basic technical analysis of the Nationwide’s inflation adjusted average prices since 1979 would suggest that house prices will not hit an absolute low until 2014 and the average UK house price will hit £88,500 before recovering. Considering the high was £193,153 this is a scary thought. Although most would say that this is ridiculous, and I would certainly not put a huge amount of money on it, it does suggest that this part of the cycle is going to be longer and more painful than many believe.

[MacK]

I want to correct my previous posting -- the numbers are in fact worse

Assuming a property price of 4 times pre-tax household income, and an optimistic 2/3 of income retained, on a 25 year mortgage the principal repayments are:

((4x100)/25) x 3/2 = 24 1/4% of post-tax income (16% of pre-tax), all before a penny of interest is paid. If the interest rate is say 6%, the the interest is ((4x6) x 3/2)) = 36% of post tax income (24% of pre-tax.) Of course double declining balances changes this, by paying principal at a lower rate in the beginning, but we are still talking about paying a huge chunk of household income -- a standard mortgage calculator shows that a £400,000 mortgage (4 times income) requires an annual payment at 6% of 31,290 -- which for someone earning £100,000 in the UK would be about 1/2 of their post tax income -- that is a lot! 2 1/2 times income equates to about 1/3 of post tax earnings -- still stiff, but tolerable.

Similarly a 25% deposit represents at 4 times income about 18 months post-tax-income, 15% a whole year.

This is why I can see house prices in the UK hitting bottom when the income multiples make sense, and a typical buyer is paying 2.5-3 times household income, but suggestions that they will return to pre-bubble-burst levels by say 2011 are just rubbish. Bubble levels were at about double the income level that makes sense. UK household incomes will likely decline 2007-2010. Does anyone seriously think they will double by 2011 -- or even 2018? How? Why? Does anyone think the banks will be that stupid, or that they will be able to get the money in the marketplace to write such mortgages.

And Mr. Draper, have you heard of sellers remorse -- I'd bite the hand off the person who offered you a health profit today, rather than lose the money tomorrow.

[Paul]

Prices of properties surely should be based on what they can be built for, ie land, materials and labour and tax etc. Once this final figure has been realisd then that really should be the base line. In Dec 2008 I purchased a 3 bed mid terrace 3years old in Liverpool for £62500 Cost when sold new was £125k)I doubt that I could have purchased the land and built it to a turn key operation for any less than that. Assuming the average wage is circ £20k then allowing 3 times average salary for mortgage purpose, should be about right. I really do not see them falling much more, and would argue that any professional buy to let investors make their purchases within the next 6 months before prices begin to climb.

[Laura Roberts]

30% minimum fall just within 2010.

These if-I-talk-it-up-enough-it-will-happen-my-livelihood-depends-on-sky-rocketing-prices-again jokers claiming 5, 8, 10, 15% are hilarious.

Talk the market up all you want Mr Clutton/Assetz/Savills, only a complete fool of an FTB would get on the market in the next 2 years, with the exception of those who can negotiate 40-50% off the selling price.

[barry draper]

Funny all you scare mongers. I am a developer and i purchased a house in SE15 (London) 3 weeks ago.
Presently we have works going on in the house, but already I have had an offer of 345k, considering i had purchased this deal to sell at 295k it seems that you should all go back to the drawing board and start throwing your doom and gloom comments/articles in the bin.
May i suggest you now use something else to sell papers? Just remember you all live in houses and it seems that you are trying to commit suicide.

[Katie]

Statistics lie. New builds will fall by another 30%, having already plunged 20. Because developers were marking up ridiculously in the first place. Otherwise desirable properties in desirable areas are simply not available. Except for the odd one or two.

[Gareth Williams]

I agree with Alister. Predictions are made by people to suit their own particular interests ( I wonder what Ben's is at 45%) There is no end to scaremongering and manipulation of the markets both in the past to push prices up and right now to push prices down. Sean is right about the sheep effect and so long as people carry on like sheep we will always have boom-bust-boom-bust-boom

[Dylan]

The average bet amongst futures traders is a 50% fall from peak to trough. Note that these are people who are actually putting their money where their mouth is, rather than just generating hot air.

And that this is an average, not a worst-case scenario.

Rather puts the "expert opinions" above into perspective.

See, for instance:
http://www.guardian.co.uk/business/2008/jun/09/housingmarket.houseprices

[Matt]

All of these people making forecasts should simply close down their companies, then resign.

None of them predicted the top in prices, yet I can give you a list as long as restaurant menu of newsletters and forecasters who did; many got their timing right too.

So all of these people who didn't call the top and who for the last year have been in denial are now come-latelys to predicting further falls. I cannot think of any good reasons to listen to them.

They need to go and get another job.

[TRISTAN]

Money Central should ask Melanie Bien to explain how two 50% annual declines would result in a 100% fall in value and properties being worth 0. How can one take these supposed experts seriously when the most basic maths is beyond them.

[Mrs Bloggs]

The Halifax and Nationwide use their own lending data to make their vested interest analyses. The Land Registry data uses all sales whether requiring a mortgage or not. It has consistently been less negative than the vested interests.

[Justin Thyme]

Amusing views from those expecting some sort of bounce in 2010.

First-time buyers generally won't be able to afford the 20-30% mortgage lenders will be asking them to deposit when they start lending again. Even then, most of them'll be too afraid of losing their jobs to commit to large debts.

Sure, over the long term, property's been a good bet but it depends on your definition of "long term", doesn't it ? Even then, that's only been a side effect of inflation - after all, £2500 in 1960-something was an awful lot of money. All the idiots who bought at the top of the market despite numerous warnings of impending doom in the public domain, aren't going to take much comfort in the knowledge that their property will, perhaps, IF they're lucky, reach the price they paid for it ten years before.

Anyone aiming to wait for the market bottom to buy property, would do well to consider Asian markets instead and also to bear in mind that this country won't have the same draw of a deregulated financial sector that it did and probably won't be as attractive to the foreign professionals who, in flocking here 10 years ago, played no small part in driving property values to their giddy heights.

The UK and the US are unlikely to enjoy their positions as the financial centres of the world again now that all the real money is in the East so don't expect property to blast off again any time soon.

[Johnny Farpans]

Hardly a balanced article now is it, I mean why were none of the experts predicting price drops of 50-65% asked their views?
Seems only bulls are allowed in The Times these days, but that's Murdoch for you.

[MacK]

In response to the odd comment on my posting -- what deposit can buyers put down. Assuming current income multiples for property (7-8x after the recent decline -- it was 9-10 at peak) and that typically a household keeps 2/3 of income post tax (60% for me) a 10% deposit would require someone to have about 1 year's take-home pay before tax. That is a pretty hefty deposit, even before someone comes up with stamp tax -- how many people do you know with 1-years income in the bank, in cash? At three times income it falls to 6 months pay. By the way the US price decline started at a broad average of 5.5 times income to 6 times income, a lot lower than the UK and Republic of Ireland's nosebleed levels of 9-10 times.

The next point to remember is that sooner or later the principal on the loan has to be repaid. Over 25 years at four times income it will take about 11% of post tax take home before even interest is paid -- but at 6% interest that soars to 33% odd of take home, i.e., 1/3. Above that someone is in serious financial danger - indeed housing stress is considered to start at 1/4 of income. So it take little effort to realise that at 8-times income a household is devoting 2/3 of income to paying for the house, and about 1/4 just to paying interest.

To the person who thought that people would buy rather than rent -- I currently rent a flat in central London, price, say £700,000 -- rent circa £24k a year, a 3.5% yield, and my rent has risen 5% over a few years, and I think it is fact high. My landlord (who has owned the place for decades) thinks it is fair and close to market (but does not admit it might be now above.) If I bought it interest alone would be £42k -- and I can get close on bank deposits. Why would it make sense for me to buy? Why should the capital value of an underperforming asset rise. This is why rents need to be 8-11% of price and prices will fall until they match this line. Again, to the people who say rents will go up, remember, it is very hard to get anyone to spend more that 1/3 of income on rent, more likely is 15-22% UK rents currently reflect this fact, which is why BTL was so silly for so long.

Finally, when you see anecdotal reports that rents in say Bexley have risen by 10% ask yourself, did incomes there go up by 10% Did a new factory open. Or are the estate agents just blowing smoke.

What is astonishing about this whole mess, and the rubbish that the press publish is that it is all simple math (OK double declining balances are harder, but excel has a function for that.) There are lots of mortage calculators out there -- income statistics by region, by job are easy to find. For example in the UK richest postcode, Kensington and Chelsea, average household incomes are about £101,600 in 2007 -- are average house prices there £455k -- just check... and then check rents while you are at it.

[jonathan]

A 30% fall will only impact reckless borrowers with over 70% LTV, the rest of homeowners will not slip into negative equity. The govt should use its bank shareholdings to ensure that no loans with over 70% LTV are offered again. These reckless loans put savers hard earned cash, and the whole economy, at risk.

[noname]

I reckon theyll go up by 10$ in the near future

[Alistair]

Come on..these predictions are a direct reflection of the interests of the people making them. The financial planner (who doesn't want you to buy property) predicts 20% fall, the developer and property investment company both predict 5%. why even bother asking??

[Ben Taylor]

I guess The Times has deliberately choosen these 10 predications to get some responses as its very obvious to ALL that apart from Armstrong Davis with his 20 per cent they are far from telling any kind of truth and whats worse is they know it and so do we!!

Figures - 15% 2008, another 30% in 2009 and more if no economic recovery,which is likely, so 45% is a good guesstimate,

[Paul]

I bought my first house in 2000, for 3* my salary. As an unqualified aspiring proffessional 70k was an awfully lot of money. Fast forward eight years and the house is valued at 150k? My salary has doubled, I'm fully qualified, but guess what. I couldnt afford to buy the place?,and I cant move because the gap to the next step up has doubled!
The property market is still grossly overvalued. The only people with an interest in this continuing are estate agents, lenders and those unfortunate enough to have bought in the last four years.
Its akin to the dot com bubble, people at the bottom of the pile, have once again got burned. Whilst fat cats getter fatter. Estate agents valuations are a joke, for evidence see the current sale numbers.

[Ross Siddle]

house prices double every seven years and after 14 years there is usually a four year correction. As prices overshot during the bubble, they will undershoot over the next two years.

Prices will fall 15% this year, 7% the following year, bottom out then should go back to around 8% growth. If history is any guide...2011/2 is when it may be deemed "safe" to look at property investment with a healthier risk/return ratio

[Gavin]

I enjoyed the comment posted by Mack but wonder if he is underestimating the size of the deposit that is put down. I am absolutley in the average demographic with respect to current income but due to inheritance and property moves I can put down the majority of the purchase price of a normal house as a deposit and only need 1.5x income as a loan. I am not alone and many people my age will have large equity stakes in their property which would skew upwards the average value of houses. The question is what is the average deposit placed by the 35-45 age group. I am sure this is a matter of record and it will most lilkey be much more than 10 or even 20 % of the purchase price. Please Mack consider this and then comment again with this in mind.