House price slowdown - a good or a bad thing?

A problem is that there are too many investors outbidding people who just want a place to live in which is their own.

As I see it, the most sensible solution would be to remove a prolific set of tax breaks and deductable expenses which cause non-resident owners of many houses to chase the distorted good deal which the present tax structure offers to them. It is not a free market when owner occupiers cannot have the same advantages.

Brought in gradually and carefully, over a couple of years whilst the essential and honest professions such as teachers and nurses catch up with house and food prices (!urgently!) in their pay, the changes could release a lot of 'investment property'.

@emma: 'On nearly every new estate 40% is 'affordable housing'. those who buy the other 60% pay for the 40% that is 'given away'. So for each house bought. the purchaser pays for 1.4 houses! How fair is that? This is one reason why housng is so expensive.'

This is rubbish. Neither the developer nor you pay for social housing created by planning deals, the Housing Association does. Little subsidy now comes from the Housing Corp. Finance for 'affordable housing' is ordinary commercial loans from the banks, and housing associations are obliged to charge rents that allow them to repay the loans.

This has the problem of not actually being all that affordable, so some subsidy has had to be reintroduced to provide 'keyworker' accomodation. If taxpayers actually want teachers, nurses, and firemen available, there is no other way.

The real problem is low wages, and that does get subsidised by the taxpayer via tax credits & housing benefit - a good chunk of which is repaid to the banks as interest/profit on the loans made to enable the social housing to get built.

The idea that housing is some sort of merit system available to anyone who works hard is unfortunately nonsense. Not everybody is in an occupation where the market value of what they work hard at matches, or can ever match, the cost of housing. They are different markets. Even if you work an 80hr week on minimum wage or near it, you won't be able to buy a dog kennel in London or many other parts of the UK

@Mr Brown 'Remember that 90% of income tax is paid by the top 10% earners.'

What is your source for that? That looks like a US figure of the sort bandied around by right-wing libertarians like Rush Limbaugh. In UK it is around 45% (according to www.taxresearch.co.uk) And you fail to mention national insurance and indirect taxation at all, which place a disproportionate burden on the poor.

Yes, Lizzy, you are right. Every market has winners and losers. Winning or losing are not moral judgements, rich people are no more (and are often less) virtuous and useful than those who will never be able to afford to buy.

Housing, a home, may not be a right, but it is a basic need. It does not go away if it is not satisfied. It just means people live pressured, uncomfortable lives. And that's true for more and more people who are allegedly winning - they are working excessively, family life is fragmenting, and the next generation will wonder who their drop-in parents were. It's the economics of the madhouse that get us all living to work 24/7 instead of working to live. It is the way in which the status quo perpetuates itself. This has its price, in crime, divorce, obesity, drugs, and just all round misery and loss of self esteem. The housing market has a lot to answer for, and it affects all of us whether winners or losers.

As someone who has (on paper) benefited considerably from housing price increases over 30 years, I would be delighted to see prices fall. Greed among second-homers and buy-to-letters has distorted the market to the point where my childrens' generation have almost no hope of buying. In London you need two people earning well above average wages to overcommit themselves for 25/30 years to buy the smallest starter flat (£220k around here). A majority will still be living at home at 40.

To the silly estate agent who believes that hype and media coverage set prices: if first time buyers cannot enter the market because they cannot afford to, the whole chain stalls.

A 'friend' who owns 6 houses rents to claimants, whose rent (his mortgage) is paid by us - the taxpayer - so he can take a massive capital gain in due course. He doesn't work, He doesn't improve the houses.. He is just taking advantage. He can't put up rents because there is a glut. And now he is panicking that every month his profit is declining. I expect a lot of buy-to-letters will now try and bale out quick, and that means a large amount of property on the market just as credit gets harder: prices have to fall as a result.

I'd cheerfully take a £200k loss to see this stupidity end. The trouble is for people who have bought at high prices and are already struggling. They will really suffer. But it cannot continue as it has. The IMF estimates the UK housing market is 30% overvalued, that seems plausible to

As with any investment the value of your property will fluctuate, however over a prolonged period property will always outperform cash as an asset. Look at the past 100 years and you will see that property and the stockmarket has performed much better than cash, so don't leave the money in the bank earning 3% after tax, do all you can to get on the ladder. If you can afford the rent, you can afford an interest only mortgage. you can convert the mortgage to repayment at a latter date

It is a fact it is a lot harder to get on the property ladder now than it has been in the past I am a teacher and I am currently in the process of 2 years of no life and saving everything I have in order to afford a house. Even after my 2 years saving I will be lucky to be able to afford anything more than a one bedroom flat as hertfordshire isnt exactly the cheapest of areas but its where my job is. I am reluctant to buy this affordable housing that is available as you dont actucally own 100% of the house you only own a percentage and pay rent on the rest so for those people moaning saying they actually pay for 1.4 houses this is incorrect. I think everyone needs to be better informed of the situations. I do feel it is unfair I have spent four years slogging my guts off to get my degree and am now working on average 11 hours a day (PE Teacher) in order to give peoples children a good education and I can't even afford to buy my own house, no having a house is not necessarily a right but if you work hard for your money have never taken anything off of the government then you should be able to afford to buy a home of your own, the fact that i have to save in excess of £20,000 as a deposit, and then still take on a mortgage of between £110,000 and £120,000 is in my opinion ludicrous.

People drive the house prices by media hype. Undoubtedly Northern Rock and Interest Rates have had an effect on the prices but this is only down to scare tactics from the media. If nobody listened to the media there would be no peaks and troughs in the market because people would buy when they wanted to and not when they were told. I am an Estate Agent and the only thing i have seen in the past three months is an increasing number of people who do not want to submit their offers for fear of the same house being 10% cheaper in January. The only reason they would ever think that this may happen is because of the media and surrounding hype.

Buy to let owners are selling because they bought too high and don't want to loose any more money and new buy to let hopefulls are latching on to them at their now reduced prices.

The market is driven by fear for loosing money. Such a large percentage of the market is taken up by people who purchase for reasons other than 'they need a place to stay in'. Everyone wants to see their assets increase in value and are now scared that it will not.

When the media announce a steep spike in house prices we will sell more houses for a higher price. When the media says we are going into a reccession then people put ridiculous offers in that are 25% less than asking prices...

We all buy and sell in the same market so eventually it doesn't really matter!

this is all going to end up in tears.tears of bitterness for sellers and tears of joy for buyers..that £100,000 profit has just become a worthless piece of paper..debt is real...

The question doesn't give an indication of any starting point. slow down from where? I am not aware that house prices in this country have doen anything but rise at a steady rate over the last 30+ years!
If the records of actual house prices are checked this is generally so. Only the London area has a tendnecy to behave eratically over the years.
Therefore there has been no 'boom' to create the need for so many rises in intereste rates and there lies the problem. Short term reaction to even shorter term blips in prices has led to massive over-correction with interest rates.
If one take a check on wage levels over the last 15 post-recession years one will see it is wage levels that have fallen in real terms. Other rising taxes and newly introduced taxes have contributed to the present day problems of affordability.
In summary, there is no slow down in the sense that it has a mind of it's own. It has been generated by short term panic measures by those who set the interest rates and make no mistake that still is the governemnt of the day, it's treasury and the bank of england.
I have always been fascinated by those in the most powerful positions in this country, although en masse are reasonably educated, are by their actions incredibly short-sighted and inept!