Video - House prices have bottomed, says Sarah Beeny

Nice interview.  I'd much rather hear the interviewer ask the questions though, than have that bloody jingle every 20 seconds.  I swear Ed only said "and your worst?" at the end to prove he was actually there!  :oP

Quite agree please do not edit your vids with a sting every 30 seconds, it's a bit amatuer and treats us like idiots.

Agree with the comment that she has been realistic in her programmes about what you need to do to make a return with developing. Some of her shows have been horrendous as the participants just don't listen and it all goes horribly wrong. Which is of course why you watch it.

I can't see why she thinks the market has bottomed.  All the true economic data is against her view.  Its only being held stable by 0.5% interest rates (unsustainable) and economic stimulas.  Prices are still well overvalued and all the gearing and fraud issues are just coming up.

She contradicts herelf when she staes people were over kent hence more price falls to come.

so house prices have 'bottomed out' at 0.5% interest rates? so how will people afford a mortage at 8% , or more , rates? And payng loadsmore tax to fund Brown's ( I abolished boom and bust- we have bust only now) deficit?

I reckon there is some sorting out to do yet, we houseowners have got off tool ightly yet in this recession

That said if you need a house to live - get one, just make sure it is the best area you can afford, ignore the wallparer etc.

Sarah Beeny generally shows excellent understanding of the market and the realities of property development and buy-to-let. She supports people who work hard and genuinely earn the profits they make from renovating houses, and she specifically counsels against thinking you can make a quick buck from property. I agree with her that buy-to-let is very difficult to justify financially on running costs alone, and so do most landlords - survey after survey shows that most BTLers know exactly what they are doing - they are not going to suddenly rush for the exits, but put in substantial deposits (40-50%) and will hold for 15-20 years in the hope of making capital gains. Most BTLers are much better capitalised than the average buyer and are in it for the long-term. If there's going to be further house price falls, it won't be because there's a collapse in the private rental market, but because there's a big growth in unemployment meaning employed people can't afford their mortgages and have to sell up.

I think Sarah Beeny has called the market right. She doesn't say prices will not drop a little more, and by arguing that prices will generally do nothing for several years, this is implicitly a real-terms fall in price and a rise in affordability, because of the likely inflation and wage rises over this period. I hope that gives some satisfaction to the zealots who insist prices "must" fall, usually just to the level at which they can afford to buy, after which they will want prices to rise.

However there is plenty still to support the market: there's very little new supply, the cost of building just keeps on rising, mortgage interest rates are relatively low and super-profitable for the banks, and prices are affordable for the small proportion of the population that wants to take on mortgage debt and can afford it. First-time buyers just have to keep saving and getting those promotions until they can afford to buy, if they really insist on buying. Nothing's changed - it's always been hard for anyone to get on the property ladder. Otherwise there's no shame in renting and rents are super-low at the moment due to over-supply. In my area (Berkshire and South Bucks), it makes sense to buy at the moment if you can afford it - you can fix for five years at 4.99% with a 25-30% deposit, and in the suburbs you will generally get significantly more living space than if you rent, plus a garden and somewhere to park. And if people complain "I don't have a 25-30% deposit", well tough luck - you just have to save harder! As Sarah Beeny says, when banks were lending with only 5-10% deposit to first-time buyers, they weren't doing those buyers any favours. First-time buyers should be positively glad they are being asked to save more, to stop them over-extending themselves.

One thing I don't agree with is the idea that a BTLetter must have a yield of such-and-such a percent, or it isn't "worth it".

Let's say you've got a BTLet mortgage and your yield is always zero.

In 20 years time (or whatever), da-da!, you've still bought a house!

The point being is that I suspect many BTLetters are not in it for the income along the way, but as a way of saving, accumulating capital, at some point in the future.

Liesar 

maybe house prices have bottomed - but few pundits agree, Jone Lange LaSalle predict a 7% drop next year.  Certainly the BoE policy on interest rates and the election next year will have a large part to play - also factoring in the end of the stamp duty window on propertys below £175,000 and the effect thjis may have on first time buyers.

We review the house price predictions for 2010 from the leading sources on our blog today:

http://www.thebigpropertylist.com/2009/12/are-you-wondering-how-much-will-my.html

List your house for sale or rent privately: www.thebigpropertylist.co.uk

@TheBPL