RUBBISH! Agents reject £50,000 house price fall forecast
Lyndon Le Boutillier from Hearnes and two other agency directors say a prediction by Confused.com of huge drops in house prices by the end of 2024 are not true.
Agents have dismissed suggestions house prices may fall £50,000 by the end of next year after Research by comparison website Confused.com made the claim.
Mortgage experts at the comparison site did a ‘deep dive’ into the latest housing market data to reveal what the average cost of a home will look like.
But agents reacted strongly to this prediction, rejecting the idea that house prices would fall this much. In comments on The Neg article reporting the research, agents said there was no way prices would drop that much.
Lyndon Le Boutillier (main pic), founder and director at Hearnes estate agents in Dorset, says: “What rubbish. The bottom of the market will be Christmas with prices starting to rise again by end of March.
“Peak to trough will be 10-12% with a 5-6% bounce in the 12 months from March 2024 to March 2025.”
Confused.com said the average house price in the UK currently stands at £246,575. But this is predicted to fall, averaging £201,495 by this time next year, and an estimated £195,652 by the end of 2024.
House prices
Julian Blackmore, a director at Bournes in Andover, Hampshire, says: “Absolute trash… again. With the bank pausing rate rises it doubled our viewings in a week.
“If they do slide further in ’24 it won’t be by much, maybe a few per cent or so. Too many people haven’t moved and want to….it’s just a question of finance costs. When rates drop expect a rapid reversal.”
James Cooley, director at Cow & Co in London, says: “We have already seen an uptick of buyers throughout September, and the comments above are far more sensible and aligned with that is actually going on and likely to happen next year.”
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Looking for some reality checks? Myth-busting is a key theme at this year’s Negotiator Conference & Expo, 24th November.
The reality is that nobody actually knows, as it depends on many different factors, with one being the medium term position of Bank of England rates. There is mention that the USA, Federal Reserve will put their rates up again, having stabilised at 5.25% for a while and if this happens it is likely be the UK rates will follow and with it unfortunately more downward pressures. So I don’’r think it’s possible to predict the future, but we do know people still need homes to live in and there will always be some property speculation if a price of any property seems attractive at the time. So, all is agents can embrace the next 12 months with a positive outlook and we can just hope these predictions are just wrong and ‘press attention grabbing’ words.
I should highlight that the original article by confused.com said that house prices will drop by another “AT LEAST” 20% more. Comments where not about IF houses price drop further, but by at least 20% more from where we are now.
Will house prices drop – depending on if you read the Financial Times or VIZ will sway your judgement. Interest rates have not yet peaked, and will remain above 5% for at least two years, property prices rose by 18% – 23% regionally in 24-months thanks to our PM (when he was Chancellor of the Exchequer), so add the two together, hyper inflated property prices and extremely expensive finance required to purchase; means the market can only go one way, and with the amount of reduced stock hitting my mobile by the hour this is just the start. Good news – mid and lower property listed at realistic prices sell in days, bigger ticket items take far longer but they always did.
Prices were always going to adjust. Rishi’s Stamp Duty Holiday disrupted buying patterns and created a boom that was unsustainable. Liz reversed the boom with her well-intentioned focus on tax and growth and, thus, created the perfect storm. The war in Ukraine impacted energy prices, and those fed through to pretty much everything else. Now there are two wars, will the war in Israel further impact oil prices? If it does, there will likely be further inflation and a potential for raising interest rates. Volatility in financial markets could lead to investors seeking safe-haven assets such as government bonds, leading to a decrease in bond yields and a consequent lowering of interest rates to stimulate borrowing, investment and economic recovery. Who knows what will happen? But, add to this the prospect of a General Election in 2024, and you have a picture that is almost impossible to predict. Almost inevitably, expect talk of an economic miracle around April next year or sooner.
None of what is happening will stabilise the economy. So, it seems likely that we will see a further fall in consumer confidence, leading to a slowdown in economic growth; again, this could eventually see Central Banks adjusting rates downwards.
Meanwhile, a £400-a-month hit on household budgets would have funded an £80k mortgage at 3.5%. By no stretch of the imagination would that not affect prices.
However, perhaps the biggest current influence on prices is, dare I say, the stock of overpriced homes that are building up due to owner over-optimism and agent overvaluation. These are homes that are creating the illusion of there being more houses than buyers. ‘Illusion’, because nobody will pay the prices that some people are asking – and yet, there they are, filling the portals, giving buyers confidence that they are now in a buyers’ market. Of course, when it comes to selling, many vendors will think that the new order doesn’t apply to the home they are selling. They will want yesterday’s price, but they will simultaneously only pay today’s price for whatever they want to buy. Stagnation will result from this UNLESS agents take control.
Having survived identical economic conditions in 1973, I know for a fact that if agents carry on taking houses onto their books indiscriminately, not controlling prices, there will become a glut of unsellable homes, and it will be agents who do not exercise control over what they put onto their books, that will delay any potential recovery in the property market and may even cause it to crash.
I would like to see an industry-wide movement among agents who understand the above toward promoting the benefits to owners of sole agencies lasting no more than eight weeks, with a two-week rolling notice available at six weeks. Why? An industry-wide agreement and promotional campaign would focus agents’ minds on getting the price right from day one. Taking houses onto your books that you know you have a limited time to find a buyer would, in a falling market, be best for the owner because, in a few months, they’ll likely sell for less than they might have today. You will be doing them a favour by saying ‘No’ to over-ambitious vendors.
At every opportunity, use social media your local newspaper, shout it in the streets, and call out sole agency terms that are longer than eight weeks (plus a rolling two-week notice if vendors are happy with the service they’re getting). Encourage owners to ask why their potential agent needs more time than that; in a stroke, educating owners would mean that agents would need to be much more circumspect about spending their money offering unsellable homes on the theory that some of them may ‘stick to the wall if you throw enough of them at it’. That way lies disaster. PropertyMark, where are you on this?
Loving your reply John, you have hit the nail squarely on the head!
Cheers – that’s kind of you, Robin.