There is a lot of speculation of what house prices are going to do in the next 12 months. And, when many other elements that all influence what is about to happen to the property market are considered it still does not give us a clear idea of what the future will be. In a time when people are still watching every penny, and luxuries like foreign travel and eating out are being cut back, it's understandable that people will not be looking to make any additional expensive purchases that they don't need. A combination of lack of credit, poor loan to value ratios and high unemployment are all elements that don't encourage people going out to buy their first house. The lack of movement from first time buyers is usually a sure fire way to enable house prices to remain, at best stable, and at worse plummet. There still seems to be a lack of competitive mortgages around that will enable first time buyers to make that first move. With mortgage payments too high people aren't able to make that stretch to get the house they want and inevitably don't get on the housing ladder. The lack of first time buyers is not allowing other home owners to move up the chain so property prices have to drop to allow the first time buyers to get in to the property game to get things moving. We are still unlikely to see loans to the scale that we did a few years ago, as banks are looking to avoid getting in the financial turmoil that they previously faced. One forecast might suggest that interest rates are set to rise again in the following 12 months and for those who don't have a fixed rate mortgage could see themselves suffering and struggling to meet their repayments if rates incline. A low interest rate, you would think, would be ideal for first time buyers, yet banks refusal to offer an interest rate that realistically reflects the interest rate is holding many first time buyers from getting on to the property market. All of these elements, lack of credit, unemployment, poor loan options, hard to obtain mortgages and people just not having sufficient funds, unfortunately reads for a pretty dull forecast for the property market. The next 12 months will possibly see a further drop of house prices and many people loosing their homes as unemployment increases. This article was written by Tom Sangers on behalf of Gateway Homes

All the more reason to tax our consumption and not our productivity. - Carlo.

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