Here's 4Homes' best predictions for house prices and the state of the market in 2009:
Homebuyers are in a stronger position than in the past. Purchasers have been putting down bigger deposits than in previous cycles. Fully 82 per cent of all new borrowers put down a deposit of more than 10 per cent of the house price during the final quarter of 2007. By contrast, 56 per cent of new borrowers put down a deposit of more than 10 per cent in 1989 and 1990.
The average deposit put down by a first time buyer (FTB) in 2007 (£34,381) represented 20 per cent of the purchaser price compared with 12 per cent in 1989. Only 5 per cent of FTBs took out a loan of 100 per cent or more of the purchase price in 2007 compared with 35 per cent in 1990.
More than a third (35 per cent) of owner-occupiers in Britain own their home outright. (There are 11.8 million households with a mortgage and 6.3 million households owning outright.) In addition, nearly one in four (25 per cent) of properties bought each year are bought with cash.
Total house sales have been much lower in the last few years compared with the height of the 1980s boom. There were, on average, 1.15 million transactions in England & Wales in the last three years (2005-2007). This was a third - 560,000 - lower than in 1988 when there were an estimated 1.71 million transactions.
First Time Buyers also account for a significantly smaller proportion of new mortgage borrowers: 30 per cent against nearly 50 per cent in the late 1980s.
Source: Halifax
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The views represented in this article are those of the author and not of Channel 4. The purpose of the article is to provide general information only and does not constitute financial, investment, legal or other advice.You should not rely on any information provided in this article and you should always seek out independent professional advice relevant to your own particular circumstances.
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