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Monday, July 23, 2012

Rents to rise but values to fall

Landlords remain optimistic on rents with 61% expecting rents to rise over the next 12 months according to the latest survey by the Halifax.

However, despite this Britain faces an 'extended housing market slump, according the International Monetary Fund has said.  The IMF has warned that UK house prices are too high and should drop by 10-15%. The IMF delivered its warning after slashing its forecasts for growth in Britain by a bigger margin than for any other major economy.

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1 comment:

Paul Barrett said...

House prices will not drop.
People no longer need to sell if they need to move for work etc.
They will just rent their place out and go and rent where they need to be.
Therefore no equity losses need to be crystalised.
This is now different from the previous HPC in the eary 90's.
I have about £100000 of negative equity and would lose about £180000However ALL my properties generate positive cashflow.
I don't need to sell and therefore won't.
In about 20 years time I reckons property values would equal the capital I invested plus the outstanding mortgage.
People are living in a dreamworld if they think that people will sell property below the outstanding mortgage or what they consider the value of their property.
Only forced sales caused by divorce or death will lower prices for those particular properties.
It will NOT affect prices in general.