What were the experts saying six months ago? Because much of the fun – if there can be any fun in reading about how much your pension pot is shrinking by – is to look back at earlier predictions to see who called it right.
At the third annual so-called Great Housing Market Debate, hosted by The Wriglesworth Consultancy in London in March 2008, leading figures representing the property industry broadly concurred that house prices would fall in the next year ie, April 2008 to March 2009.
David Miles, managing director of Morgan Stanley, predicted house prices will fall by 20 per cent in real terms in the next two years. Mr Miles is sitting pretty.
Miles Shipside, commercial director of Rightmove, said: ‘There is a large gap between sellers’ expectation and buyers’ ability to pay. The market needs to openly accept a 10 per cent reduction in house prices to achieve an orderly correction to affordability.’
Mr Shipside is well on the way to seeing his wish come true. Several of the panellists also stressed that any house price correction could be a good thing, as it would help first time buyers back to the market.
David Miles commented: ‘House price falls will have as many gainers as losers. The quick way that first-time buyers can be helped onto the market is if house prices fall.’
The lone analyst who claimed that housing prices would increase in 2008 was Stuart Law, chief executive of Assetz. He said: ‘The mere fact that everyone said that house prices will fall this year reaffirms my belief that house prices will now in fact modestly increase.
‘This lack of confidence within the industry is a clear indication that we have hit rock bottom and things are set to improve. The dire shortage of housing stock in the UK will spike up rents and keep prices afloat.’
Mr Law, it seems, would have done well to heed coach Stengel’s advice.
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