Croydon House Prices To Fall 15% In 2008
By Paul Reeder
Sound familiar? Estate Agents and Building Societies make a profit from a healthy vibrant property market. No surprise, then, that they continued to talk about a “healthy correction“ and a “sensible stabilisation“ in the early nineties as the average house price was in dramatic free fall.

The reports today on London regional TV are largely based on a report by Rightmove.co.uk which showed a decrease in December 0f 3.2% followed by a fall of 0.8% so far in January. So what does that mean for London and Croydon in particular? Take the trouble to visit Rightmove.co.uk and actually open the report and you will find a month‘s rise of 3.5% for Croydon and 3.6% for London generally. Further, the December slow-down was attributed to a rush of would be sellers to beat the HIPs deadline.

So no need to worry then? Well not quite. Rightmove bases its price assessment on the asking price for properties as they come onto its web-site. These prices are primarily dictated by the Estate Agents who pay Rightmove and don‘t necessarily reflect the level of offer eventually accepted nor the length of time the property takes to sell - and properties are taking longer to sell.

So where else to turn? Certainly not the Building Societies. Halifax, for example, reported a rise of 1.3% for December based on loans actually approved in November, and then seasonally adjusted. Being winter, the seasonal adjustment would have been upward. The morgages would have been approved after purchase negotiations, credit checks and a survey - so the sale itself could have been agreed in September.

More revealing are the figures from the Land Registry which show a decrease of 3.6% in Croydon over the past month and 4.3% over the past three months. These prices are the actual sums for which completed property sales took place.

Many pro pundits are confident of futher interest rate cuts by the Bank of England Monetary Policy Committee, but where is there to go? The value of the Pound is falling versus the Euro and the Dollar, not just because

of the interest rate position. Britain is seen as a bad bet internationally right now because of record government deficits as well as the trade deficit. Cash is flowing out of the UK. Inflation is high and not fully under domestic control due to exposure to oil/gas prices and increasing Chinese and Indian producer‘s prices. Added to the effects of weakening Sterling our cheap imports are slipping away.

Over at the London School of Economics the outlook is fairly grim too. In a Financial Times report Willem Buiter and Julian Le Grand saw falls of 30% and 20% on their way.

Just to add our opinion to the mix we see an outcome based on an average of the experts‘ predictions at around a 15% fall this year. This will only take prices back to the record highs of 2005 but relies on the Buy-to-Let brigade having the financial courage and stamina to see meagre earnings from their day jobs wiped out by by falls in their second and third properties. Interest rates have got nowhere useful to go, and we certainly cannot rely on an export led boom to get us out of trouble this time.

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Part-time webmaster and article writer living in South London. Running several web-sites including www.croyweb.com and www.webmastertech.co.uk.