Have House prices reached a sustainable level?
According to Land Registry statistics Houses sold recently in the Wolverhampton area have been achieving sale prices at levels last seen in late 2004 / early 2005. This equates to a fall of about 20% from the market peak in late 2007. Have we now reached a level that is sustainable going forward? Bank of England Governor Mervyn King and his colleagues on the MPC seem to be hoping that further significant falls will not occur. This is what the latest MPC minutes said on the topic:-
“A stabilisation of house prices at current levels would benefit homeowners, limiting the reduction in their net wealth and capping the scale of negative equity, and would provide support to the balance sheet position of banks”.
If the Bank’s sentiments are correct then both buyers and sellers will need to adjust their expectations. At present there is a stand off with many sellers who missed the boat unable to stomach the reality that the market will not bounce back any time soon and buyers reluctant to commit because they fear further sharp reductions. Only time will tell but with hindsight it may turn out that 2009 wasn’t a bad time to do a deal! We have certainly seen a greater willingness to strike deals in recent weeks but, after all, our Clients are a pretty “savvy” lot!
Compliance Officer for Legal Practice
Andrew oversees the Firm’s Quality Systems and is committed to making sure that our client’s receive the very best customer care and attention along with the best marketing and legal advice in the area.
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