House prices are in a state of flux

House prices are in a state of flux for both new buyers and those trying to find family homes. If you’re thinking of purchasing a property read this first.

House prices today are in a state of scared expectancy. First-time buyers have seen acquaintances and family members get their fingers burnt and get caught in the negative equity trap. Similarly, average house prices have risen to a point where some families are despairing of ever finding the space they need for their kids to grow up in.

Estate agents and the government are now keen to allay the public’s fears and to indicate to an amount of greater steadiness, where house prices are levelling out and rising and new buyers are being offered a considerable number of interesting options in their search to gain a foot on the property ladder, especially by developers and the govt.

However, there’s reason to be careful. Some industry leaders are warning that prices cannot sustain themselves at a level that is unaffordable. This level is often judged to be identical to around three times a person’s salary. Once property values exceed this level, it is said that they’ll come back down eventually.

Given that a modest London income is roughly £20,000 and those with some experience can earn over £30,000, it’s obvious that house prices, whether these are for terraces for couples and new buyers or for bigger family homes, are at present well above £120,000 i.e. Three times £30,000.

With the current level of commercial doubt in the UK because of the current recession, which some experts are now calling a ‘depression’, the weakness of the pound against other currencies, and reduced amounts of employment, with numerous folk defaulting on mortgages, some are presaging a ‘double dip’ recession.

This would suggest that, far from having reached their final low level, house prices are facing a non-permanent hike. Over the coming years, they could then take an even bigger dive to levels that are nearer to three times the average income. New buyers may then see costs at a level where they’d be in a position to purchase a house and maintain a mortgage.

Naturally, you’d have to be a clairvoyant to forecast what the future holds apropos house prices. However, many industry commentators are now advising consumers to hold off till the market settles down a little more. There’s also a stand-off in that sellers are reluctant to put properties on the market at a price lower than they paid themselves.

We’ll just have to wait and see how things go. Hopefully there’ll be some excellent news for first-time buyers and families soon. After all, it’s not as pleasant to lease when you can own a property and change it into a home.

UK house prices have a ways to go so as to get back to affordable levels so buyers would be sensible to be cautious before dipping a toe in the water.