WHAT’S IN STORE FOR

What does next year’s prop­erty mar­ket hold for me and for you? Re­ces­sion or soft land­ing? The prop­erty boom of the past 10 years has con­founded the doom­sters so far. But this year things may just be dif­fer­ent. The credit crunch has brought to its knees No

The Daily Telegraph - Saturday - - Crystal Ball -

Frus­trated first time-buyer, 25, rent­ing in Lon­don

Re­lax: it’s your turn to en­joy your­self. You have seen prices run­ning away from you for sev­eral years, and suf­fered the gloat­ing of con­tem­po­raries who stretched them­selves to get on the hous­ing lad­der. For you, ev­ery mar­ket slow­down has proved to be a false dawn, but this time it is dif­fer­ent: the chances of a sig­nif­i­cant cor­rec­tion in house prices are grow­ing by the day. You should keep ac­tively search­ing for prop­erty: the more you keep your nose to the ground, the bet­ter the de­ci­sion you are likely to make. But you needn’t hurry, and you cer­tainly don’t need to do what some of your friends did two years ago — buy with a stranger just to get on to the prop­erty lad­der.

Try look­ing in Hack­ney, east Lon­don – which is one of the places where, ac­cord­ing to the Hal­i­fax, prices could do best next year. And keep an eye on the auc­tion rooms: re­pos­ses­sions are ex­pected to dou­ble to 45,000 next year, which means a lot of prop­erty will be dis­posed of at knock-down prices.

VER­DICT

Keep look­ing, but don’t rush in

Cou­ple, both 28, ex­pect­ing first child, liv­ing in £160,000 three-bed­room house on new es­tate in Boo­tle, Liver­pool, with £150,000 mort­gage

You strug­gled to get on the hous­ing lad­der, and now you are won­der­ing about the wis­dom of it. Next June, your two-year, 4.75 per cent fixed rate mort­gage comes to an end and you face ei­ther hav­ing to pay your bank’s stan­dard vari­able rate of 7 per cent or else stump up at least £1,000 – which you can’t af­ford — for a new fixe­drate mort­gage of about 5.5 per cent. And, worse, your job is look­ing shaky. As an in­vest­ment, your home has proved un­ex­cit­ing: its value seemed to go up for a while; now it seems to be com­ing down.

The bad news is that your type of prop­erty is likely to un­der­per­form against the rest of the mar­ket. Ac­cord­ing to the in­for­ma­tion com­pany Ex­pe­rian, Boo­tle, has the du­bi­ous dis­tinc­tion of boast­ing some of Bri­tain’s most highly-mort­gaged streets – one where the av­er­age mort­gage is worth 99 per cent of the av­er­age prop­erty. Newly-built es­tates are a mono­cul­ture of highly-mort­gaged fam­i­lies who have bought at the top of the mar­ket; many of them are now strug­gling and one or two have al­ready suf­fered the trauma of re­pos­ses­sion.

VER­DICT

How­ever, this isn’t just an in­vest­ment: it is home to your grow­ing fam­ily. It will be painful, but you should hang on as best you can. The good news is that in­ter­est rates have al­ready come down one notch: fur­ther falls are likely, al­though, with in­fla­tion still a dan­ger, far from cer­tain. If you are hav­ing trou­ble, you should con­tact your lender as soon as pos­si­ble. Breathe in, for­get the for­eign hol­i­day and try to hang on

Buy-to-let in­vestor, 36, with 10 flats in Birm­ing­ham worth £1.25m — and a £1m mort­gage

“It was Mrs Thatcher who got me my house,” said one for­mer Labour voter, ex­plain­ing why he was back­ing the Tories in 1987. By the same to­ken, you are

Hack­ney... where first-time buy­ers might get lucky

In the swim: for some, un­cer­tainty in the mar­ket means cling­ing to home base. Oth­ers may look starry-eyed to­wards the Scilly Isles (above), where there is less chance of a crash than any­where else in the UK

Boo­tle...Bri­tain’s most highly mort­gaged streets

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