It would appear on reading all these comments that..... nobody has a clue what is going to happen in the housing market, as there are so many conflicting views. Most of the comments are what certain individuals "hope" is going to happen based on their own personal circumstances at present. If there was a cut on interest rates, then you would find the BTL'ers attitude change very quickly, likewise the first time buyers, as this would inspire more confidence in the market. This problem only reared its ugly head due to multiple interest rate hikes within the last 12 months.

Ricky, Belfast,

The 'housing shortage' in the UK is not huge - people who say that it is have clearly not tried renting recently. I rent a new place approx every 6 months in London, and the number of properties has consistently increased and the prices consistently dropped over the last 3 years.

Why? The market is awash with B2L, we all know this, with yields at a crushing low (especially in London). A big proportion of B2L investors are going to be forced into leaving the market over the coming 2-3 years, bringing up to 1,000,000 properties back into the sales market. That coupled with the increased building activity underway (with the built in lag effect of about 12-18 mths).

Do I hear the immigration argument to bolster demand? I have a Polish friend who lives in a VERY full house. His aim is to save money, not live in a Luxury 2 bed apartment overlooking the thames. The demand they produce relative to their numbers is low.

The market is going to fall fast between Jan-May.

A Kent, London, UK

I can't see the slow down affecting all parts of the country. In Edinburgh there is a massive shortage of one bed flats to let, people are signing contracts for them before even viewing the propertys. When a one bed / two bed flat comes on the market for sale they are gone within 3 weeks with up to 15 people registering intrest in them. Slow down in prices....I dont think so, no wonder so many investors from down south are investing up here.

Craig, Edinburgh,

Tracy Kellett, Oxon, UK. We're in a typical transition period at the moment when boom turns to bust. There will always be some people willing to buy whatever the market conditions. I was an inexperienced young solicitor in the early 1990s and around 1990-1992 the housing market then still appeared to be strong. Only with hindsight, when the big picture emerged, was it clear that this was the early stages a a major property downturn. There's good and bad news emerging from your story. The good news is that your clients who were outbid had a very lucky escape. The bad news is that the type of service you offer is likely to be in much reduced demand as the extent of the forthcoming downturn becomes clear.

Graham, Oxford, UK

Tracy Kellett. Consciously or otherwise I think that you reinforce why a major downturn in property prices is on the cards. Nearly 900k for a 2 bed flat and over 600k for a cottage. These are insane prices and we have reached these levels not through shortage of supply or any of the other pseudo justifications currently being peddled, but through pure speculation. Property is no more worth the current prices than some of the 'values' placed on dot.com shares just before the bubble burst. That there are still some people willing to pay these prices proves no more than there will always be a few idiots in any market. I expect that a few people were still buying dot.com shares as the prices collapsed - expecting the bounce back which never came. I've no idea what the price levels will be in 20 years, but countries such as Japan show that propertyprices can collapse and stay collapsed for a VERY long time. A big risk unless the money in question is no more than loose change to your clients

George, East Sussex, UK

As a professional homefinder working across the south-east I am finding a completely different scenario. This week we have tried to purchase four properties. In Marylebone a two bedroom flat at £825k went to £885k on sealed bids. A cottage on the Hants/berks borders valued at £595 was bid up to £650k .A Kent pile at £1.5m achieved £1.65m and we have had to pay full asking in both Surrey and Hampshire for two properties at the top and lower end of the market. The reality is a great lack of good property and lots of good buyers. Buy to let properties and properties with problems are likely to continue to fall but good family homes are in short supply and people are still prepared to pay for them.
My clients recognise that a potential blip in prices over the next 12 months or so is a long term irrelevance in the purchase of a 10-20 year home.Tracy BDI Homefinders

Tracy Kellett, Oxon, UK

The supply and demand issue - not really true. To be a qualified demand, there should be the need/want and the ability, although admittedly there area lot of people out there who need/want to own a home, they do not have the ability at the moment because houses are over-priced and way out of their league. Which is why prices will fall below the actual 'market correction' values. This is when people can begin to afford them, and confidence will return bringing the prices back up to the 'correction value', i.e., true value.

Nush, London, Mdx

There are great deal of comments that have been made re the supply and demand issue, I assume these comments are made 'ceritus paribus'. What is not considered are possible cultural changes to the views on home ownership. Brits are currently obsessed with home ownership more so than most other European countries?
To what levels will prices have to fall before 'would be property investors and first time buyers' decide that a 30 yr commitment for a shoebox next to a railway line is worth 30 years of repayments....!

Looks like the Government might have to snap up all these extra repossessions, only to re-house the owners!

dan, london,

Take a graph of house prices for the last 10 years. Turn it up side down - now you see what can happen to house prices !

What will happen if the UK economy slows down ? Less jobs for all including immigrants who will need to return home as it will be cheaper to be unemployed there. What will happen to the demand side of the equation then ? If you are a buyer, sit on your cash and wait for the bargains. The best bargains will be the BTL flats as when the amature BTL's get squeezed they will all head for the exit at once the herd mentaility will prevail.

Make no mistake people are going to get wiped out. Easy come, easy go as they say....

Naresh Patel, Stanmore, UK

Many people could only afford to be ‘buy to letters’ because rental income was covering mortgage outgoings. Now that mortgages are substantially higher than rents many of these people will need to get out. Add to that the fact that there is a likely-hood that current prices are as high as they are going to be for several years and with rents unlikely to increase, unless they plan to cover a large shortfall for several years they would be wiser to cash in while there is still something to cash in on. Take into account also that it has been risky loans that has pushed prices beyond any normal person’s budget. Now the risky loans have dried up and there are far less people able to buy at current prices so demand is dropping. And while all these other indicators are pointing to a property fall, the one thing holding it off is the lack of housing supply. As soon as the buy to letters start to bail out that last barrier will be gone too. Then we will see the real property crash.

Simon Densley, London,

Anyone who is reading the article above and exclaiming "yippee", "about time" or "I told you so" is a little naive.

Search elsewhere on the Net and you will find various articles from reputable sources that contradict everything stated above.

In addition, search through the archives and you will find information wrongly stating that the market was at it's peak 2 years ago.

Joe, Chelmsford,

From what I can see the market is built on BLTers and other vested interests, who themselves are built on ignorance but provided with ammunition (easy credit). I think the basic mantra people should spread is evidence…Japan had a higher rise in population growth (proxy for immigrants), double our population density (far less supply potential), lower interest rates and lower unemployment than us leading up to, and a few years past, 1990, BUT prices fell there from 1990 to 2005.

Raj, London,

Having lived through the Asian Financial Crisis where house prices in Hong Kong fell by an average of 70%. (They were the highest in the world). I am convinved that a crash will occur in the UK. Like Hong Kong and Japan, the propery dealers keep on telling people that there is more demand than supply and there would be never be a crash. I would say don't listen to this nonsense, they are talking like this because they are scared.

Derek Wong, Hong Kong, formerly Bristol,

Buy to lLet has had a bigger impact on the UK house market than immigration.
The government should abolish tax relief on buy to let investments..then maybe our kids might be able to afford homes !!

SteveTimms, edinburgh, scotland

As usual some people just got over enthusiatic and forgot that all good things come to an end, BUT I'm absolutely sure this is a pause for thought, or common sense, rather than a collapse - 'a correction' as the economists say . Those relatively few who have speculated (or gambled) on second and third homes in the UK, may have to review their expected returns, - so what! The majority, who bought for somewhere long term to live, and as a way to consolidate their earnings in the long term will lose nothing, and I'm sure have nothing to worry about. BUT those who have bought in Spain, France and other European countries, in the past 2 years, borrowing money against their UK property, could be hit by a double whammy as these housing economies have also reached their peaks and the risk of a downturn is also very high. Overall though, those of us who have survived and learned from the crazy 1988 situation aren't really surprised.

Marita Gray, Mulhouse, France

I removed myself entirely from the market last year having made some gains. Surely you would have to be very dim to not see this coming? An unsustainable bubble with HPi at 12%+ and wages at only 3% it was only a question of time before the correction came. In fact in the end UK.com will be a better place for this.....

Ken Hill, Aylesbury, Bucks

I agree with the person who says that house prices are in part kept high by immigration. However, what you forget is that most people coming to London do not do so permanently. We come for a few years to earn money and occasionally to travel. Being temporary we are neither unable or don't want to buy and so stay in the rental market, keeping it artificially high.

London is becoming so expensive that I think the city is near a tipping point where people will stop wanting to move here. We'll be able to earn more at home and have a better quality of life without paying a fortune for substandard housing.

If cool britannia did end then that could have a huge effect on the rental market, which may just burst the bubble for all those buy-to-let speculators.

Miles, London,

In the last 10 years property has doubled. Earnings have risen 50%. The rest of the property rise is due to supply and demand economics, inherited wealth, low interest rates, lifetime mortgages, immigration etc. The property market has lots of factors currently driving it forward.
As for the disgruntled teacher, i used to be a teacher but knew it wouldn't pay the bills so got into property investments. Once i'm set up i would possibly like to go back to something like that. However, there are several key worker schemes that'll help you get your own place in case you're not aware of them

jackboy, London,

Brian Devert, New York, USA. An excellent point, but unfortunately it will be lost on those who really need to hear this message. Financial and general mathmatical awareness in the UK is appallingly low. How else could people believe that property can continue to rise at 15-20% pa whilst wages are rising at less than 5%. The simple point that quite soon monthly mortgage payments would exceed monthly salaries seems to be beyond the comprehension of many. Sadly, the reality will only hit home when the bailiffs are at the door ready to turf some of these people onto the streets.

George, Brighton, UK

I welcome a fall in prices.

I am 30, with a good salary and looking to buy anywhere in W/SW London. It is impossible. Nothing that is 'normal' costs less than £250k. That is a quarter of a million pounds!

What upsets me is that I have worked very hard, my entire life, to succeed and do well. Yet owning a modest 1 bed property is beyond me in this current climate unless I leave the tube line, my job and my entire social network behind.

I really do think that on this regard this country is failing young people. Stay away FTBs!

Susie, London,

In the past 50 years our standard of living has improved dramatically - compare our food, our holidays, our cars or our clothes. The change for the better has been fantastic! The big exception is housing where as one newspaper reported recently "We have never had it so bad". Importantly the supply of housing, which was Nationalised in 1947, is the one nationalised industry that remains nationalised today. If supply were allowed to respond to the market forces of demand, prices would never have got out of control and we would enjoy a vastly improved quality stock of housing. Indeed, instead of complaining about immigrants we could have them building us dream homes to rival and even better the much admired housing bequeathed to us by our Victorian and Georgian ancestors. What will we leave future generations - lots of nasty little "affordable" boxes at unaffordable prices that no one really wants to live in.

David Cardale, Tetbury, UK

NH - all I've been trying to say is that if there was a real shortage of housing then the rents would be higher. In some areas (New Barnet, Hitchin, northern cities) companies like Barratt have been building like crazy and many flats are now empty. Of course affodability is an issue. For example, if you are earning £2,000 a month net and your mortgage costs £1,700 you are not in a position to buy unless you are silly enough to self-certify!

Peter Vuorela, London,

House price gloom as the wealthy turn away
Tuesday, October 30, 2007
Now we know why the World BANK or the IMF does not want to help the African continent, sir. Money is all that matters to the rich. Is that the message we get from the rich indirectly

I thank you
Firozali A.Mulla MBA PhD
P.O.Box 6044
Dar-Es-Salaam
Tanzania
East Africa

Firozali A.Mulla MBA PhD, Dar-Es-Salaam, Tanzania

YIPEEE!

Perhaps I wont be living at home until I'm 30 saving all my money for a deposit on a mortgage after all.

This is bad news for the BTL brigadge, but lets not forget that those in that situation can at least afford a house in the first place.

Bob, Aberdeen,

Basic economics 101 if demand rises and supply falls prices will rise.

Affordability for the average buyer is NOT the issue.

Housebuilding in the UK is very low compared to the past i.e. in the 1950's and 60's.

The problems in the US market is of over supply- huge amount of new cheap housing coupled with lending to people who could not possibly afford to meet payments and extreme greed by agents arranging loans.

Demand in the UK is rising due to population increase and falling household size and greater life expectancy.

Do not confuse the London prime market with the total UK one, the volume of sales for very expensive property are very low.

Avoid investing in tiny flats, the real long term demand growth is likely to be in 3 bedroom freehold houses with gardens.

NH, Warwick,

I think its certainly time for a large scale correction. I just wish we could organise all first time buyers to hold off purchasing property until prices have come tumbling down. If all first time buyers just stopped buying houses and flats this would assist in rapidly bringing down prices (at the expense of greedy speculators who seem to care nothing about so many people on medium incomes being forced into overpriced accommodation). Yes - bring it on.

Digby, Wigan,

I find it amusing that some people still go on about increasing population (demand) and turn a blind eye on affordability. Increasing population won't be able to keep the currently over-valued property market going on unless people can actually afford to buy. Rents, on the other hand, have only moved up marginally since 2000. The real reason for house price increases during the last eight years or so has been speculation, speculation, speculation. 'Buy today as tomorrow will be more expensive' has actually been the case until very recently, resulting in a feel-good factor fuelling further increases. Now that the confidence seemed to have waned, the market could actually fall especially as there are plenty of empty flat in cities like Manchester, Leeds and Liverpool that no-one wants to buy. So much about demand...

Peter Vuorela, London,

I sold a small BTL one bed flat in March for £105K. I have just seen an identical one in the same block advertised in a local estate agents for £100k.The one I sold was not in great condition so how do you explain this if prices aren't coming down fast.Bear in mind also that this is the advertised price and the owner may accept an offer within 10%.I think the reason for the drop is the fact that there are about a dozen or so new apartment blocks being built locally and supply and demand has kicked in.

Mike, Dunstable, England

This is NOT 'gloomy' news. Falling house prices is good for the vast majoirty of home owners. The only people who will lose out will be those who use property as an investment and frankly they should know the risks.
Lower prices will mean that first time buyers have a chance of buying a home and existing owners will have more opportunity to got up the chain.

So who's gloomy?.

Dave, Maidstone,

House prices in the long term are determined by rental yields and interest rates. If your house is renting for 10,000 pounds a year and the bank deposit rates are 5%, then one would expect a maximum value of the house to be 10,000 / 5% = 200,000 pounds (the idea is that no one is going to pay more for property risk than what they are getting in a bank on a risk free basis). If you have bought a house recently where your rental value divided by purchase price is below bank deposit rates then you should be worried. Otherwise you should be able to ride out any market turbulence. Hopefully, flash gordon will help everyone by lowering interest rates.

Navid Chamdia, Doha, Qatar

If prices increased by 10-15% every year for the next 25 years, the price would be 6.58 million pounds !!! How much would a first time buyer have to save then to buy a house worth 6.58 million pounds ? In 50 years time, the house would be worth 217 million pounds assuming the rate went up by 10-15% a year !! Please do your own research before assumming house prices always go up by 10-15% a year for ever !!

Brian Devert, New York, USA

****Just watch**** Now that house price inflation is falling suddenly housing costs will become part of the CPI inflation calcuation.

Caroline, London,

"People who say they are pleased about a house price crash are usually those who are disorganised with their money and basically are jealous of those who own property"

Utter nonsense! I'm a 35 year old school teacher in Oxford, where property is 9 times my salary or more. I owe no-one any money and have considerable savings- though not enough to buy a house at these inflated prices. My father (who by his own admission IS useless with money) bought a two bedroom terrace of necessity following his divorce for £90,000 and sold it a few years later for £180,000 when he moved in with his new partner. A couple of years later it sold again for £230,000. I for one am pig sick of gloating BTL owners who have made a lot of money through no great financial acumen. We'll see who's facing misery in the next few years as prices adjust to a sensible level based around earnings. There has never been a boom without a corresponding bust EVER.

Dan, Oxford, England

L, London. If you really believe this, you are talking fantasy economics. If the UK (including London) housing market was a pint of beer, at least half of it would be froth. Once the speculative froth is removed and prices have fallen by 50% to where they should be based upon economic fundamentals, then immigration/emigration might have a modest effect on these prices.

Clive, Sussex, UK

Housing prices historically rely on two things: mortgage availability and population (demand). Our population is set to rise, in particular in the South East, whilst mortgage availability is set to drop marginally. Therefore it is unlikely that any significant downturn will affect the potential long term increase in property prices over the next seven years. The unprecedented increase in recent years has in part been down to the incredibly relaxed immigration policy we have in place. Although the decrease in City jobs & bonuses will affect 2nd home buyers, the steady influx of 1st home buyers into the market will continue to buoy prices at the lower rungs of the ladder - thereby propelling the current owners of those properties further up. Love it or hate it, the property madness that grips this country is set to continue.

L, London,

Re: The BTL Downturn


On two previous occasions I've been forced to move from rented accomodation due to reposessions as a result of chancer landlords defaulting on mortgage payments.


The obvious inconvenience and expense due to a forced move through no fault of your own is just the beginning.


The longer term consequences kick in when applying for credit (eg a mortgage) because the credit agencies react adversly if you have too many addresses on record for the previous 3 years of your credit history.

Wes, Glasgow, Scotland

What about what goes up must come down?

Phil Linehan, Mexico City, Mexico

House price increases over the past decade was beyond ludicrous and turned normal home owners and estate agents into greedy people. Some realism was long overdue and if you were one of the poor sods trying to get into the market at a realistic level, you would also be glad that there will be a correction. As a prospective buyer who have been gazzumped by buy-to-let landlords and treated like dirt by estate agents, I say hurrah for lower prices.

Linda, Weybridge, Surrey

"Have you all out there who cheer for lower house prices learnt nothing at all about the market place."
"You need a stable economy,that means stability in the market place." Mike, Lincoln, uk

This is possibly the worst comment yet. STABILITY dear Mike, is not allowing house prices to increase 200% in the space of 5 years, complete with the debt, credit and social crisis it brings. You cannot have your precious stability if you allow this to happen, and falls are inevitable.

PT, Tynemouth, UK

If there is not enough housing for the 200,000 people apparently coming into London every year, why have rents not gone up over the last 5 years? This is a liquidity driven Ponzi scheme driven by BLTers and cheap credit, where none of the financial ratios have made sense since 2003, particularly in London. I have been looking in London and there appears to be a stale mate in areas I am looking. I have made silly offers and they have been rejected, but I carry on seeing the houses I put offesr on (and many others) not moving off the books. One funny thing is to see houses I know I saw in June being sent via email alerts as new instructions, or shown as having been on the market for 3 weeks when I put offers on them 3 months ago. I have no competition as BLTers in the area have figured out there is no profit to be made…just a question of waiting for sellers to panic. It is a popular area and the population is rising, so why is the massive surge of immigrants not helping the sales?

Raj, London,

I know quite a few landlords who have sold their
rental properties this year. These are serious investors
they know a bubble when they see one and they have been
getting out over the past year. However there are plenty
of new BTL landlords ready to join the party just in time for
the hangover.

Mark, Loughton, Essex, UK

The UK economy is a false economy based on creating an overpriced housing market supported by reckless lending. It has to end sometime and sooner rather than later will lessen the pain in the end. Labour have deliberately created this situation so Brown could claim to have 10 years of economic growth. What else could they base growth in the UK on since we don't manufacture anything anymore? It has all been propped up by 1.4 trillion pounds of debt, years of deliberately low interest rates, rampant immigration, speculation and greed. When it collapses the UK economy will practically collapse and we will be looking at a DEPRESSION not a RECESSION. It may never recover as before. Economic depressions don't just happen they are allowed to happen to concentrate wealth ever more into the hands of the elite.

chris, shoreham, sussex

"People who say they are pleased about a house price crash are usually those who are disorganised with their money and basically are jealous of those who own property"

Or those that see getting a mortgage that is worth a good few years salary is a good thing in order to get a house. Put it another way, the only people unhappy at this news are those people who have made money in the past few years with their BTL properties.

Jamie, Halifax, West Yorkshire

'...triggering fears of price falls in the South West, East Anglia and the Cotswolds.' Are your journalists aware that many locals in those areas would be delighted at prices dropping? This really is rather poor, one-sided journalism.

While demand might be outstripping supply I do not believe that the more than 100% increase in price my house has seen in 7 years is solely down to that. There are other factors are work which will need correcting. The housing market cannot be run to satisfy the needs of the mega-rich and greedy second-home owners. So bye-bye billionaires, so-long sixties baby-boomers, hello affordable housing for the rest of us.

Will Duffay, London,

Its trippled in 10 yrs - why is anyone in the slightest bit surprised that its coming off ?? Prices could come off 25/30 pct no problem. People are too leveraged - period. We need an injection of realism.

rob, london,

It's not judgement day, but it may be homecoming day for a number of unwise investors. I know many buy to let landlords who pay far more in mortgage than they get back in rent, and never even took account of periods of un-occupancy, or expensive repairs. The fallacy of being able to see massive capital appreciation is well over the hill, and many of these BTL landlord need to get out of the market or risk losing their main homes. This "correction" will often release poorly maintained properties onto the market and force prices overall to drop, it;s inevitable, but no more naive that the banks blindly buying these worthless CDO's for billions - just ignorance in sound financing at every level of the market. A time for prudence and accurate risk assessment has belatedly arrived. A pity for the masses in the US who are to be made homeless, and there will be casualties here too.

Roarke, London, UK

Have you all out there who cheer for lower house prices learnt nothing at all about the market place.
When house prices fall as with all consumer products so do jobs,then follows wages,you need a stable economy,that means stability in the market place.
As you can read on the web a slump in house prices throws people out of work,and yes it could be you!

Mike, Lincoln, uk

For those who think the demand is always going to be there, bear in mind that the change of government in Poland, new government in France and the continued hostility to immigrants, combined with the glut of buy-to-rent, may see a sustained fall in demand as people leave London and the UK and all those who bought second houses have to sell up to meet their growing double-mortgage commitments. I know many people who are in debt to the hilt, thinking their second homes will provide them income into retirement - rising interest rates are rapidly changing the sums.

Gareth, London,

While I would agree with the value neutral comments the same should have applied on the upside.

Property has to fall because basically its been oversold for a 5 years propped up by sales people from banks bulders and estate agents who dont want to see this years commissions collapse from "inverse growth" and pyramid mentality buyers who now have nobody left to sell to .

Mike Smith, Oxford,

Demand may be increasing a few percent per year, but the cost of money (mortgage rates) has increased over 50% in just a couple of years. At the same time, the availability of money (mortgage / income ratio) has been severely tightened post sub prime.

Whilst property remains a strong long term investment, it is of no surprise to me that the people pulling out are the city types. They are the ones who truly understanding market fundamentals and posses the perspective to look beyond a decade and a half of year on year growth…

Tim Nicholson, London,

This is all economics of demand and supply and is long overdue with house prices being unrealistically overpriced in many areas. So many people can no longer afford to enter the housing market and supply of houses/flats is on the increase. It is very good news for those 1st time buyers, who if being wise should hold off longer to drive prices down further. However for those who have recently entered the housing market and put their faith on future rises, the longer they stay in, the worse their damage will eventually be. Better to look elsewhere for investments.

Richard, Belfast,

Something we all need has become cheaper. That is good news.

Frank Upton, Solihull,

Property IS overvalued in relation to average incomes. Why is it everyone keeps going on about demand outstripping supply? This only applies to certain types of properties in certain areas. In some areas (such as N Herts) there's oversupply, just look at property websites like rightmove. There's oversupply at both ends of the market: too many one bed shoeboxes that have only been bought to make a quick buck and many expensive properties no-one can afford, with a shortage of affordable 2 and 3 bedroom homes for average families, but mostly a shortage of cash to buy at current prices. Most of the so-called demand has been from investors, and even if there is a lot of demand, if people don't have enough money they won't be able to buy, it's as simple as that!

Adda Macchich, Headcorn, Kent

People who say they are pleased about a house price crash are usually those who are disorganised with their money and basically are jealous of those who own property.. There may be a flattening and downturn for a while, but housing in the Uk will always be a great investment.

Elaine, Reading,

Sorry but i have no sympathy for people who are losing out in BTL property now. Why should people like me who want to own a house have to be priced out by BTL investors who buy up all the property and then rent it back to us. I'm glad your losing money! Maybe with a few months of falling prices and BTL investors bailing out, the housing market will reach some kind of equilibrium where people who want to own a home can afford to

Mike, London,

The Supply and Demand argument is nonsense. How many of those 200,000 people coming in from (I presume) Poland, Eastern Europe, Asia and the rest can afford a £350,000 1-bed flat? Answer? Not many. They will shack up with friends and family or rent. Because wages haven't increased in line with the property market If your wages can't afford the mortgage then you can't buy irrespective of Supply or demand.

The market is changing around us. My advice is stay put as this is what the big bonus brigade are doing on the quiet - they just haven't told you yet!

Richard, London,

About time!!
I am a 27 year old 1st time buyer and like many of my friends stuck living with my parents, even though i have a decent deposit. You my say why dont 2 of you get together to buy something? But the reality is its still not enough!
The bank of england and the government have totally cocked this one up.
Living in the south east it is a nightmare

Sorry guys but bring it on - maybe this is the light at the end of the tunnel.

Kate Browne, Tonbridge, Kent

House prices may be stagnating or dropping, but a shrewd goverment currently has a very tight grip on our finances. Tax is a a record high and interest rates are also biting. Aswell as interest rate increases, there has also been a rise in the standard rates of many mortgages (egg for example has increase 0.5% in addition to rate rises since 2003). The prospect of house prices falling drastically won't happen as long as the government doesn't become too obsessed with inflation. Supply and demand are not so much the factors, but affordability. Demand is still very high - thus a cut in rates at any point would boost confidence immediately in the market. Also if a rate cut didn't work, a cut in either Stamp Duty % or a rise in thresholds would also boost the market. Failing that changes in tax credits / tax thresholds / income tax rate could all boost demand but the latter is likely to cause inflation. It might be hitting in the short term, longer term there won't be a drastic correction.

Adam Jarvis, UK, UK

It is very easy to see the different states of people in the market from the comments posted. There are obviously many overstretched borrowers who can't afford prices to drop. Oh well, that's markets for you. Personally, I think supply and demand are on the back burner as banks tighten up their lending criteria and reduce the income multiples they are willing to lend on. Sanjay, Palmers Green, do you really think that the immigrants who arrive in London, for the majority, can afford to buy in the most overvalued and expensive city in the world?

Ed, London,

Seeing as the entire UK economy is now based on a huge debt mountain driven by a continually rising (and massively over-inflated) property market, the time when the 'nulabour' mirage of 'economic stability' is sussed 'good and proper' is nigh.

And when that time comes, the 'bill' for the past 10 years of government waste won't be far behind it.

Jon Leigh, Southern, France

About time. I sold off 4 BTL properties from last summer until March this year. When I bought the first back in 2004, it was overvalued, but I banked on rising prices creating a pyramid effect (like in teh pyramid selling scheme). Now, those with BTLs are teh ones with the worthless hand.

With a 45% mortgage on my main house and 270k in the bank, I'll be back to pick up a few cheap repos in a couple of years - have fun!

Steve Marsh, Guildford, Surrey,

I agree with Mark (Norfolk). People need to prioritise what they want. If you need to get onto the property market then some things have to be sacrificed. I'm sick and tired of hearing about the poor first time buyers not being able to afford property. What about the rest of us who have sacrificed a lot to get onto the property ladder ? Are we supposed to lose money now that we have struggled and worked hard to make it happen, and just take it on the chin, in order to give first time buyers a chance ? First time buyers are usually the young, they have plenty of time ahead to make the leap forward and more time to pay off a mortgage, as opposed to the rest of us who are still struggling with mortgages at over 40. Its time for an interest rate cut to inspire some more confidence in the market at present.

Ricky, Belfast,

Wonderful! I sold my house earlier this year at the top of the market. I get 6.4% interest on the equity.

I rent a lovely house in the country.

When the market drops I will buy a nicer house than I started with.

What's the problem...?!!!!

Richard, Newport, Isle of Wight

And it could have been avoided,to a great degree, by realistically greater interest rates,restrictive lending criteria by banks/building societies ,and good management by the previous Chancellor and the Bof E;
They have been truly negligent in their behaviour and have let the country down very,very badly.
The UK economy is largely based on house prices and cheap loans and this is a recipe for disaster.

Nic, Royan, France

The argument for 'supply and demand' and 'shortage of housing' is nonsense. If there really was a shortage and 'nowhere enough new homes' as Sanjay Mazumber is saying then the rents would have been rising in line with sales prices. Funny, in some ares (such as Carshalton and Sutton) there are properties that have been on the market for six months and some of them are not selling even when the asking prices have been dropped. In Sutton alone, there was 11 one beds available @ £170k price range alone on Saturday.

Peter Vuorela, London,

I dont know where these stories that house prices are inexarably rising come from. I am facing ruin because I have two BTL flats that have been bleeding me dry for the last 18months and their actual value has fallen by tens of thousands of pounds in the meantime.
As a consequence of this proceedings against me now threaten my home and I have been advised that selling up is the only way out. I am now in a race to beat repossession and bankruptcy and my agent has told me that the market is "funny at the moment". Not that funny in my opinion.

john, Redhill, Surrey

I have had my three-bed mid-terrace house in Southampton up for sale for six months. I thought the agents priced it too high and after two months I cut the price by £5k to £167k. I accepted an offer of £165k. Then the male partner lost his job and they could not proceed. A week later it was sold again. Later that fell through because they were hoping for a fixed rate mortgage from Northern Rock -- other lenders were more than they could afford in repayments. I am sold again now and I think this will go through. I think the housing market is a lot tougher than it is portrayed.

Mike, Southampton,

At last! I am thrilled!

houses are hugely over-valued especially as the majority of people buy houses as a place to live, not as an investment.

This is excellent news, it's just a shame that it didn't happen about 3 years ago as now I fear that people who have been foolish enough to pay far too much for property will now fall into difficulties that will be quite difficult to get out of,

Milly, Oxford

Emilia Clark, Oxford, UK

Prices go up, and prices go down. The present contineous upward move could not go on indefinately, it had to reverse sometime.

I want to both sell and buy as I am 'moving down' and obviously I do not want to pay over £250000 to avoid the 2% increase in tax (stamp duty). So I, and I suspect most people, will be glad that prices are moving downwards.

However the shortage of property around here will ensure that the move will be quite small.

Edward, South Coast, UK

Is it too much to ask that this issue could be reported in more value-neutral language? Falling house-prices are NOT bad news to many (vis others' comments), but mainly the vested interests (estate agents, mortgage cos, etc) - I realise that these are a source of revenue for the media, but that shouldn't colour the terms in which these matters are written up (cos that's what it looks like)..

RS, IOW,

oh please. this 40% overvalued IMF study is nonsense - by their own admission it takes no account of supply and demand... continually dragging it out in every article about house prices is lazy journalism and doesnt make it any less worthless.

anyway bring it on. a nice 50% drop will make a move from london to the countryside much cheaper...

marco, london,

I was considering buying, but after viewing 3 ridiculously over-priced properties at the weekend I think I'll rent for a while. To be honest £270k for a shoebox with exposed wiring, a kitchen in need of a total replan, requirement for overall redocoration, no room to extend, 2 bedrooms the size of storage units at Big Yellow and a view of a railway line, well I think I'd rather pass thanks. The market is deluding itself if it believes this sort of rate is achieveable or anything less than insulting. To add insult to injury, the agent showing me around was in complete agreement!!!

Luisa, London

Luisa , London,

I'm looking for properties as a firts time buyer in Bristol at the moment. As the market stagnates I find sellers are pulling out because if the fall in house prices leaving alot of rotten apples on the market which I'm sifting through. People are so used to their property being so overvalued that they will not sell (unless they have no choice).

I say bring on the credit crunch and I'll be there to pick up the pieces!! Just you wait Henry Higggins!!!

Andrew, Bristol,

40% overpriced is a bit high, but selling houses is not like clothes and TV's where you can have a sale of 40-50% off, but for this week only!!
Confidence needs to come back, this will take time we may see 30-40% reductions to get some people moving, but long term, they have to go up again, as a 40% reduction in next 6-8 months buy to letters will be back in force! as the yields start to make sense again!

paul, bexleyheath, kent

When everyone you know is on the bandwagon, its time to get off.

Phil, LONDON,

The Housing market can be studied like an Oil Tanker coming into dock , it does not happen in one movement but actually stops 3,4,5 miles out ! Well, the housing market has been slowing for while ( July onwards ) but not reported until now. Just remember this "That Oil tanker is very Visible" and will be soon ready to Anchor and when it does look out .... Charles James

Charles James, South West,

This article is utter nonsense. The population of London is growing by about 200,000 people per year with nowhere near enough new homes to house them. Therefore prices will keep rising or at least hold. Price in my area have risen by about 20% in the last year and there are no signs of a slow down. Maybe the top end will get dampened, but anything up to £500/700k will keep on rising.

Sanjay Mazumder, Palmers Green, London, UK

To all those who wish for a house price collapse so they can then jump onto a ladder they should be carefull of what this wish for. A major downturn of the housing market is opften accompanied with job loss and a general reduction of available household income. Yes, the house you wantto buy may be cheaper, but if you haven't got a means to pay for it then the end product is the same. I suspect that many who wish for cheap housing becasue they do not have the available money probably do have the cash to buy CD's, DVD's, drink and cigarettes. The general culture is one that demands everyone has everything straight away. In many (but not all I agree) they prioritise there outgoings in such a way that prevents them from having enough to buy a house. My grandmother always told me that one should "Cut one's cloth accordingly." Perhaps this is a skill we now lack in the UK.

Mark Chisholm, Dereham, Norfolk

I have been searching in west london / Acton and have seen some prices drop by 40K in order to make a sale. Things are not looking good.

Ollie, london,

It's about bloody time.

Tim, Brighton,

I've been trying to sell my house for 5 months now in central london. After a few inital viewings I didn't recieve any sensible offers. Now I've had to knock almost 20% off the price and still no one is viewing. The people who previously offered have now basically said they're pulling out of the property market.

I hope the situation improves soon, but I haven't seen any positive news for months!

Paul, London,

About bloody time. High house prices benefit no one. Would be firs time buyers can't buy. People wishing to move up the ladder find it more and more difficult due to high house prices. Older people wishing to trade down find they can’t as they’re children still live at home.

Tim, Brighton,

This is only bad news if you are looking to downgrade or get out of the housing market. I.e. this is only bad news for older people who have already made a killing on the property market and will still be selling their porpeties for much more than they originally purchased them for. If you are looking to get a bigger or more expensive place it is good news as the relative cost of moving up will fall.

Alex, Stroud,

i told you this a few months ago, the wealthy no longer want to buy property here and have moved to asia where its booming.
London property prices are in decline bigger percentage drops that what is being published.

mat, london,