Given that house price figures are being deliberately manipulated by the Media, I was inclined to search beyond them and go into searching for REAL house prices, and it seems to boil down to one thing! House prices through the years have had a steady climb on a graph apart from one or two blips or booms if you prefer, but the line on the graph has always got back on track to it's original direction. Now considering that low interest rates are keeping peoples heads above water when it comes to paying there mortgage, it just begs the question what is going to happen when the inevitable increase in interest rates comes about? Add the fact the Government have put a stop to the stimulus that kept the banks from pushing for repossessions of defaulters, then it becomes clear that there is going to be a mad scramble to sell in the near future, especially when the message hits home that the real value of houses is nowhere near the price the owners want it to be.
It is as simple as this: North East average house hold income of £19,130. Times that by what the banks are prepared to lend at 3.5 times income, and that leaves a real average house value at approx £66,500.
That is without taking into account the deposit needed by 1st time buyers or the cut backs that are headed our way. All in all, the message needs to get across that people need to face up to the truth and cut their losses, otherwise when the Banks are forced to repossess, they owners will be left with debts much higher than if they had acted earlier and put a REAL asking price for the property, rather than ask for enough to clear the debts. In the long run if people keep burying their heads in the sand, then they will ultimately lose their property with the added weight of huge debts as well.
Click on the link to check Mortgage calculators