House price volatility will prove short lived and the market will stabilise within the next year, estate agents believe.
According to a recent Abbey survey, an optimistic 30% of estate agents expect house prices to stop falling in the next 1-6 months, while a further 31% predict that prices will stabilise between six and 12 months from now.
Such optimism stands in stark contrast to most other predictions for the UK property market. Indeed, on the same day as Abbey’s report was released, the CEO of property advisory group Savills was warning that prices could fall by as much as 25% over the next two years.
Five days earlier, Nationwide Building Society data showed prices were falling at their fastest year-on-year rate since 1992, whilst lenders across the board have been revising their price forecasts for the coming year downwards.
Homeowners positive
According to the Abbey survey, only 9% of estate agents expect the slump to last longer than two years.
Interestingly, the survey identified similar optimism amongst homeowners, with none of the respondents expecting the slump to last more than a year. In fact, most feel it will be over in just seven months.
Light at the end of the tunnel
“Estate agents and homeowners believe that, despite current movements in house prices, we are unlikely to experience a really prolonged period of house price falls,” explains Abbey mortgage director Phil Cliff.
“Most think the period of decline will be over within a year and a very small minority think it will last longer than two or three years.
“While this is 'light at the end of the tunnel', it implies that estate agents and homeowners are bracing themselves for further falls in the very near future.”
Homeowners play the waiting game
Among the other highlights of the survey, the vast majority of homeowners (79%) are prepared to wait for any further house price falls before they make a decision on whether to move.
A further 7% of homeowners plan to take advantage of house price falls in the next 12 months by either snapping up a bargain and moving to a larger home or by selling their home and moving to rented accommodation.
