Each article claims to be correct, each prediction is crammed with statistics and "inside knowledge", however, the more i read, the more i am resolved to make my own decisions and form my own opinions based on my work in the industry. Working in sales and lettings on a day to day basis, i am acutely aware of the state of the property market, what's hot and what's not, what sells and what doesn't, and drawing on this knowledge and experience, i can conclude the following points:
House prices will fall -
No matter how many articles you read predicting the slow but steady rise of house prices over the next three years, house prices will fall. How do i know this? It's simple.......they have to fall, the state of the current property market is NOT an accurate reflection on the state of the economy, average salaries, interest rates, first time buyers mortgage process......i could go on.......quite simply, people can not afford to buy houses.
As an example i have carried out some research on a generic, three bed property in a popular area of Shrewsbury, Pool Rise, Springfield, Shrewsbury. Taking this property as an example, i hope to highlight the problems facing first-time buyers and young families hoping to settle into that "forever home". The property i have chosen to focus on is a 3 bed, terrace property, with a large conservatory and good sized garden to the rear, perfect for a young family looking for a little extra space.
In 1999 this property was sold for £60,000, compared to £131,500 in 2014, that is an increase of £71,500 in 14 years, a 54% increase. Comparing this to salary fluctuations over the same time period, using http://www.tradingeconomics.com/ to determine the average salary throughout the UK from 2000 to 2014, i can see that the average salary fluctuated between £306 per week and £409.75 per week, this is a total of £103.75 or 25% increase in average salaries from 2000 to 2014. As you can clearly see, something doesn't quite add up here, house prices increasing by 50+% and average salaries by only 25% over a fourteen year period........now you tell me if further rises in house prices is likely to be possible?
The current market is at the same level now as it was in 2007 (the spike of the property market), shortly after this the property market took a very steep and sudden dive and it has taken the past 4-5 years to stabilise and climb back to previous levels. The current market can not maintain it's position due to the lack of buyers.
Saturation of the Market -
From a position of experience in the current property market i can say with some confidence that the current market in Shropshire has reached a point of "over-saturation" in terms of property for sale. We are seeing increasing numbers of properties being advertised for sale, Landlords trying to take advantage of the peak in the market and cash in on their investments, existing home-owners looking to "up-grade" while they can get top end prices for their current properties, the market is becoming flooded with property.........with no one to buy.