What situation will cause UK property prices to fall? (eg interest rate rise etc)

  1. Interest rates won't rise sharply, but any rate rise will have a knock on effect on property prices and mortgage lending. Some parts of the country, particular London and will see some price rises regardless. Most parts of the country are going to see more price falls, the supply of houses far outreaches the demand. The same problems faced are difficulties obtaining a mortgage. House prices being too high to income ratios. Economic recession and rising unemployment etc… These issues are the same issues faced each housing price crash. There has been a mini boom this summer, but it will not last. Greed tends to fuel price rises, people wait for prices to rise and then miss the boat. I have known people wait out the boom of 2006/2007 and then market their overpriced home only to see the crash. Then greed builds again and the next price fall or stagnation happens and they are still waiting!
  2. No one can guarantee that interest rates will not rise. most governments need to borrow money to operate. If the market will not lend to them then they have to raise rates in order to attract lending. If the US do not sort out their government funding issues anything could happen. Every serious commentator observes housing SHORTAGES not oversupply as indicated by the previous answer. Unemployment appears to be falling and growth appears to be returning. If growth returns strongly, the BOE will put up interest rates to dampen inflation. These are the main threats to UK housing prices.
  3. There might be a lack of housing for the entire country to buy a property, but there are millions of properties for sale which are just sat there not selling. The lack of 'affordable' housing or social housing might be an issue, but this does not mean the market isn’t inundated with overpriced or unaffordable properties. I am finding it hard to find a suitable property I can afford, but I can tell you that there are thousands of properties sat on the market not selling because either people can't afford to move or can't afford what they want so stay put. There is never going to be enough properties to go around which are affordable, but there are always too many properties for sale which no one wants or can afford. I think it is naive to think that there aren't enough properties to go around, it is about affordability and putting empty houses back into a liveable condition for people to live in. Building more is madness, get those empty houses back into action!
  4. House prices fall significantly where there is a decline in demand or in cases of excess supply. Property price fall involve situations such as rising interest rates, high unemployment which causes high rates of repossession, fall in bank lending and a fall in mortgage availiability, changing demographics and excess supply in the housing market

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