House prices have fallen in England and Wales for the first time since November 2001, a new report has found.
Hometrack, a housing market analyst, said property prices fell by 0.1% on average, and it was the "first clear sign that the property boom is over".
The report comes days after a survey by Skipton Building Society found that first-time buyers are avoiding joining the housing market, due to fears of possible interest rate rises, enormous borrowing and uncertainty over property prices.
Is the property boom over? Are you delaying the decision to enter the housing market? Do you think your decision to wait is close to being rewarded?
This debate is now closed. Read a selection of your comments below.
Your reaction
 The free market doesn't have society's best interests at heart  |
The basic problem in the south-east is that a relative minority of very rich people can outbid pretty everybody and push all of the prices up. It only takes one person offering (say) 150k for a flat to push out 100 people offering say 50k. Yes, it's a free market, but the free market doesn't have society's best interests at heart. People tend to forget that.
Nick Green, UK
I clearly remember the last property recession. It was all talk of first time buyers having to get joint mortgages, 30yr+ mortgages, moving up north to buy etc, etc. It's the same story now. So don't worry - housing in the SE became very affordable shortly after that. Wait -you'll be fine.
Jonathan, UK
I am deeply concerned about the level of borrowing at the moment. People are taking on debts way beyond their means. Perhaps if the lenders refused to fund such crazy levels of borrowing we would not have the overheated market we currently face.
Steve, UK
The further north you move the more buoyant the market is |
I agree with the comments made above about a south-centric attitude towards house prices. They may be falling in the south but the further north you move the more buoyant the market is. In Edinburgh prices are reckoned to be rising by �1000 a month in some places. In Glasgow, where I live, I've just sold a flat I bought 5 years ago for a 100% profit. But that's little comfort when everything else has risen proportionately in the same time scale. Price rises might slow slightly but I really don't foresee them actually reversing.
Fraser Gillies, Scotland
My house is my home and I love it. I don't regard it as an investment, just my home. Price rises and falls don't affect or bother me, it will still be my home come what may. It's a shame more people don't feel like this, then we would not be facing the potential of recession brought on by a house price crash. People seem to be motivated solely by making a quick buck. If the market crashes, I believe it will be a media generated 'self-fulfilling prophecy'.
Peter, UK
Here we go again. People whining that with their salaries they can't afford what they 'want' in the 'right areas'. Yes, the north is cheap, move there if you want, it's lovely! The south is expensive, and no, you won't be able to afford to buy your dream home, so either get a bed-sit, or get a joint mortgage with someone else. But do us all a favour and stop whining about it. This is a free market, nobody is forcing you to buy, so you don't have to!
Ted, UK
In my areas of Nottingham, sellers are increasingly having to lower their asking prices. The main reason for this seems to be that houses are staying on the market for much longer than they did this time last year. I think the local estate agents got a bit carried away with their valuations in the middle of last year, and reality has now dawned. It's not so much that the selling prices for houses are falling, rather that the asking prices are returning to a more realistic level.
Keith, UK
We feel more secure renting than buying at the moment |
My partner and I live in Reading. We will soon be renting a 3-bed house for �850 pcm. Whilst I agree with the view that we are paying someone else's mortgage, we already know that we will never be able to afford a house in the Reading area (unless of course, we want to live in a tiny shed!) We are both paid good salaries, but it just doesn't seem to be enough. And whilst it seems mad to pay all that rent, we don't want the burden of such a massive mortgage. My friend lives on her own in a 3-bed semi in Yorkshire and she earns about �500 pa less than me, yet she manages ok. It's really frustrating. I often worry about how we would cope if we had a family. There is no easy answer, but we actually feel more secure renting than buying at the moment. At least we're not stuck if the rent becomes too much.
Angela, UK
Let's hope it's over! I get paid more than a lot of people I know but I still can't afford a house. I don't feel sorry for anyone who is using property as an investment and is about to lose money. You are the reason prices have risen. Supply is restricted when selfish, greedy people buy multiple properties trying to make quick money. How many low income families can't and will never be able to buy their own home if these current prices stick or rise further.
Troy, UK
No one knows it seems, as one week we are being told they will go up in the North and down in the South, and the next week it's all over! I think the media are writing scary headlines just to get readers!
Martin Curtis-Emerson, England
I earn over �50K and have been trying to buy a place in London for some time, but am very unimpressed by estate agents, who are acting for the seller. Can't someone act on behalf of the buyers, and put these swindlers in their place.
Kerry, London, England
Wages are too high in this country |
I think the problem is wages are too high in this country. We work the longest hours, get the strongest economy and get the highest pay. As such those running the economy need a sink hole for people to throw money into in order to keep them working. In this country that has become house prices.
Darren, UK
Wages are too high in the UK? What job do you have Darren? Wages in this country are pathetically low. The average person cannot even get a mortgage on a bedsit in London without resorting to 50 year mortgages or daft things like that. The problem in this country is that inflation never includes house prices so wages never go up by as much as they need to.
Ben Morgan, UK
In the southern parts of the country, yes. So I've released some equity in the south and bought houses in the north. I've made 16% in eight months - neat. This my pension, since I don't trust any pension now.
Robert, London, UK
Yet again, what is happening in the south east of England is assumed UK-wide. What is worse, the government reacts the same way. If the south east housing market is overheating we dampen the economy and put the rest of the UK into recession. Now that it appears that the south east market is cooling we will see UK wide measures put in place that will overheat the rest of the UK
Gerry, Scotland
Just ask your grandmother about the buying price of her house, and imagine your answer to your grandchild. Buy now, no questions.
Ivan, Australia
I hope it is - I'm looking to move to a bigger house and would dearly love the gap between my current property and my dream property to narrow a little. I've got nearly �100,000 worth of profit in my house, but it doesn't help me because the next step up is even more expensive!
Karl Peters, UK
I wouldn't even consider buying at the moment! |
I am really surprised to read here that people are buying property and exchanging contracts this month. I can't help think this is sheer madness. I wouldn't even consider buying at the moment! Get out whilst you can! Save yourselves!
Tom, UK
My main worry is future interest rate rises, as my salary isn't going up, inflation is low, and the monthly mortgage repayment will seem expensive for a long time. I am switching to a long term fixed rate mortgage to relieve this worry. I feel that mortgage repayments should be fixed throughout the entire term as this will remove the main future uncertainty, and stop the Bank of England from having to worry about homeowners when setting interest rates.
Michael, UK
Unless people want to revert to a Communist-style housing market where you ask the government to approve your house purchase, and if they consider your application reasonable they sell you the property of their choice at a set price (if they think you're asking for more than you need, they refuse it, of course), then we might as well get used to the idea of the free market based on supply and demand.
John B, UK
London's going to be a ghost town full of old people or foreign investors. The only mistake us first time buyers made was being born too late and in a time when the salary-to-property value ratio has gone through the roof. My peers are all moving out - and with that is an attitude that we don't want to spend four hours commuting across London each day. So we're leaving our London jobs too.
Fiona, UK
I have been renting for three years. My intention was to save a deposit before committing myself to buying, but in that time prices have increased to such an extent that I feel as if I am further away from my initial aim than I was three years ago.
Darren, UK
I've just offered (and had accepted) �93k on a tiny studio flat which last sold in December 2001 for �51k! I am worried about being the mug that pays someone that much of a profit, but then again my mortgage repayments on the flat will be smaller than renting it, and I have to live somewhere. I have spent six years renting since leaving university and am tired of paying other people's mortgages for them.
Hannah Vowles, UK
The housing market is risky |
I bought my first house a year ago. I then got a job in finance where my bosses were amazed at what I had done. They pointed out that such large increases in price means one thing only, the housing market is risky. If you can keep your investment (shares, houses or anything) for a long period of time, you should be able to cope with bubbles like this one, and the next one when it comes. Problem is at my age, 25, I don't know what I might need that money for in the next few years. I have sold up and am now renting. Yes I am paying someone else's mortgage, but I don't have that risk any more.
Christian, UK
Things are definitely out of hand. I work in the City, but the house I bought three years ago would now be out of reach for me if I were to try and buy it now. Although in that time my salary has gone up about 30%, the price of the house has nearly doubled. So while it's nice to be sitting on six figures in profit it doesn't actually mean anything unless I sell up. With prices the way they are I'm tempted to sell and emigrate, but property in Manhattan is even more expensive than London!
X, UK
The 'buyer's remorse' disappears after about six months |
As a first time home owner in the US, the stress of buying a home is the same over here. Most people go through payment shock, because typically here, rents are much lower than house payments. Then financing for 30 years seems like an eternity. Rates are good right now, and we probably won't ever see them this low again in our lifetime. Don't worry about the "buyer's remorse" it disappears after about six months, as does the feeling that you are living in someone else's house. Good luck to everyone!
Margaret, USA
I would love to get on the property ladder but I am single, and don't want my entire life to revolve around paying a mortgage. I earn approx �24,000 a year, but that would only allow me a mortgage of about �70,000 - and in the South East that is not enough. I don't want to be up to my neck in mortgage repayments - even a mortgage of �70-80k would mean high monthly repayments. Therefore, I have decided to pursue working abroad, at least for a year, after which I may return to the UK, but if lifestyle and house prices are more favourable in New Zealand, I may decide to live there permanently.
Joanna Moores, England
We are moving to the West Midlands. Even here the price of homes is ridiculously high. We are having to rent and will wait until house prices crash - which they are bound to - when interest rates start to climb again. There is no longer any sensible correlation between average earnings and average house value. This is the biggest signal to the market that conditions cannot continue as they are. Lots of people will find themselves in 'negative equity' again, and knowing the experience of many during the early 90s, will only have themselves to blame.
Jamie, England
There's loads of empty or cheap houses in Britain. It's just that they're not in Islington, Hampstead or Clapham. The problem isn't the housing market. It's the South East-centric economy we live in. Why don't some of you southerners move North? And before you say, there's no jobs. There is. You just won't earn as much. You won't pay out as much either.
Lloyd Pearson, UK
I'm a native Londoner and live in California. I like the idea of returning home but the absurd property prices and what you get for your money is dreadful compared to here.
James Keynor, USA
That's the free market for you |
A lot of people talk about 'unrealistic' or 'ridiculous' high prices and rents. But, the prices are what they are. It's not like they've been set by the state deliberately high or something. If there really were no new buyers or renters then prices would become a lot lower extremely quickly. Because they're not, I can only think that some people out there are still forking out the cash. That's the free market for you.
Ben, UK
I have been working as a construction engineer since graduating in 2001. I have lived in many places around the UK but fortunately have had all my rent and accommodation costs met by the company. The thought of having to rent or purchase my own house at the moment is utterly depressing. I've recently returned from four months of work in Vietnam where I'm now planning to build a house - not just because it's cheaper but because the quality of life is also better.
James Titcombe, England
People offering way over the odds to buy property to let are pricing first-time buyers like myself out of the market in Lothian (for a house in a decent area). Not deterred, I knew what I wanted with my new house and I had to buy in Fife and am now reluctantly moving away from the town I know and have been brought up in.
Peter F. Chalmers, Scotland, UK
Buying or renting in the UK is a rip-off. Unless you have a massive amount of cash you can only acquire sub-standard, shoddy, cheap-looking accommodation. There's no imagination to the architecture or interior design of British homes. I think I'd rather invest my money overseas.
Ben, UK
House prices are fall in my area (Reading). The supply of houses on the market is growing quickly in relation to the number of buyers. That means prices are set to fall further.
William Dunnett MRICS, Britain
It won't be long before the bubble bursts |
I am tired of the overly optimistic view of the housing market which is pedalled by the banks and building societies. I hope that people remember their role in romping prices when the crash happens. It won't be long before the bubble bursts. We need only look at Enron and the dot.com bubble to observe where overly optimistic investment can get us.
Will, UK
I was planning to buy my first house later this year, but as most people in this country seem to see houses as investment vehicles rather than places to live, I have been completely priced out of the market. Hopefully house prices will crash soon, and I will then be in a position to take advantage!
Johnson, UK
I work as an IT Manager in Essex, I've been renting now for over five years and would not even consider purchasing a house at this current time. House prices for where I live average from �100k for a one-bedroom flat to �160k for a half decent two-bedroom house. I am 25 years old and on a salary between �15-20k. I currently have no plans on buying a house in the south of England as I would be looking at a 40 year mortgage for a small home.
Steve, UK
I graduated from uni four years ago, and I find myself still living with my parents after this length of time. There is simply no way on this earth that I can afford a house in the current climate, and if the forecasts are right about house prices doubling in the next 10 years, I will probably still be living with my parents when I am 36!
Andy, UK
My boyfriend and I are first time buyers and in three weeks will be moving into a flat in West Sussex. We both live in the Greater London area and have been pushed out by the house prices which we couldn't even dream to afford. We were fed up with waiting and just decided to do it. West Sussex is fab and we are both looking forward to getting out of London for some peace and quiet!
Beth, UK
I fear I am going to be forced to rent for the rest of my life |
I cannot afford to purchase my first home or even a decent flat in South East London because the prices are insane. I fear I am going to be forced to rent for the rest of my life.
Kathy, UK
House prices are definitely softening in London. But it is very hard to know whether or not to buy. If this ease in house price inflation broadens, it makes further interest rate cuts more likely. This, in turn, leads to greater affordability. As mortgages are more flexible and can now be fixed for extended periods this adds some security. All of this plus a housing shortage means a major bust is unlikely, even when you consider the amount of buy to let and investment property that is being put up for sale. But if enough people believe prices are way too high, you might get a bust anyway. Confused? It's the only way to be.
Robert, UK
I am avoiding buying a house for the simple reason that I am still to pay off my debts to the government to have a degree level education. I cannot contemplate buying a property where I live (London) because the house prices are so artificially inflated that it makes it impossible while I am still trying to clear my debts.
Rich, UK
Yes, I'm holding off because I'm afraid of 1989 happening all over again |
Yes, I'm holding off because I'm afraid of 1989 happening all over again when interest rates rise, only this time it will be far worse because people are already spending their inflationary gains by increasing their mortgages. Also there are far more buy-to-let properties which will be dumped on the market when prices fall; which will accelerate the crash. The MPC isn't allowed to consider house prices when it sets the rate and so interest rates have been too low for too long: the bigger the boom the bigger the bust! I don't want to get caught out at the top of the market and be in negative equity for the next ten years. I can afford to buy now, but I'm not going to!
Mark, London, UK
I would love to own my own house. I earn an above average salary and still can't afford a home in the less "affluent" areas of Sheffield where I live and work. If I think I'm badly off (even more so with all the various tax rises in the last year), how can people who are earning under the national average afford to live?
Sally, UK
We are first time buyers and hopefully our purchase will complete in a few weeks time. We found a flat we liked, and can afford it so decided to go for it while we can - if house prices do go down, then at least we will be paying off a mortgage for something that will be ours one day, instead of paying off someone else's via rent. House prices may come down, but interest rates may also go up, so is there any guarantee that property will become any more affordable?
Stephen, England
I'm 23 and working as a civil servant in Edinburgh and I have no hope of getting a house in or around Edinburgh due to the massive house price increase. In the last year the prices in Scotland have increased 25% a year. Also Scotland never sees negative equity, so I can't borrow enough to get on the ladder. Cost of living in Edinburgh is now in par with London yet we see no rate increase for work. So I'm forced to live with parents or rent and save no money. Houses go for anything from �10k to �50k over the asking prices.
Peter, Scotland
I'm moving away from my home town in Kent as my fianc�e and I can't afford a house even with our combined salaries. The more we save for a deposit then more we need and if you don't have a reasonable deposit you end up paying high indemnity charges. It's ridiculous when at the age of 30 neither of us is in the position to be able to afford a home of our own in our home town and are forced to relocate further and further away from our families.
Claire, England
We've just got to hope we jump on the price rollercoaster at one of its good points |
My partner and I started renting a property last November, despite paying the same amount in rent as we would be paying for a mortgage of about �135K, our salaries are too low to get us a mortgage for the sort of property we want. This housing boom has to stop at some point, it did before, it will again. I'd guess though that it will be very short lived when it does crash as the thousands of us renting will suddenly jump in to the market to buy - and probably push the prices up higher than they are now. I don't think we'll ever "win" with the housing market, we've just got to hope we jump on the price rollercoaster at one of its good points!
Nicola, London, UK
It's crazy to expect a first time buyer on just over basic wage to purchase a home. The prices are not realistic, and are out of reach. Renting is now becoming cheaper then actually buying. I rent my home, and I've found this much cheaper then buying the same class of property. Even when I started renting just over 18 months ago, it was cheaper. Now it's just a complete joke. Problem is, I don't find this funny. The UK has a problem, and the sooner this is picked up on, the better.
Michael, UK
I'm a recent graduate and have no means of funding accommodation after university. Returning to live with my parents is not an option as there is no work in my home town, yet the places where there are jobs are prohibitively expensive to live in. I think that prices have to crash soon as so few people can afford to buy, my one concern is what sort of impact that will have on rents.
Kathy, UK
Oh this brings back memories! Back in 1988 we were overtaken by the property bubble and were saying exactly the same. Eventually decided to stretch ourselves and managed to buy a flat in 1989 - looking the interest rates back then - 13.99% when one month's take home wages used to pay the mortgage and the other to pay for the rest (both wages @ �650 pm each)we struggled but then that's part of the process. No car, no holidays, taking a calculator to the supermarket, scrimping and borrowing. Slipping into negative equity and back out again. Going through two redundancies Eventually making only a �25K profit over 10 years and moving to our house. Was it worth it? Hell yes. Who wants to pay rent forever. The thing to remember is this is a long term thing and is about your home not making money. If you can buy I say go for it - we did and are looking forward to a rent free future.
Rebecca, London, UK
I am 28, single and live in London and I can't even afford a place in areas I don't want to live in. I earn a reasonable salary - higher than the national average but lower than the London average. I am therefore considering moving to another part of the country, away from family and friends. I have seen brand new 4 bed detached houses in Lincolnshire costing less than 1 bed flats in the area I live in. I'm keen to get on the property ladder, but concerned about job prospects and salaries outside of London.
Phil, UK
I'm getting married next month and was looking to buy a house, but as a self employed designer I was told to forget it by a mortgage advisor. It seems almost impossible to buy at the moment, and renting just feels like being stuck in limbo.
Dave, UK
I'm seriously considering emigrating |
I am amazed by how difficult it is to buy a house particularly the price and the way estate agents treat you. I'm a professional and earn a decent wage but still I can't afford to get on the market. Because of this for the first time in my life I'm seriously considering emigrating.
Richard, Sheffield, UK
I think first time buyers are too picky. They expect their first house to be a three bed semi (which was plausible in the late 90's). There is still affordable housing available for those who are prepared to start lower down. Isn't that why it's called a property ladder? I can't see interest rates going up with the manufacturing industry in the state it's in. I think it's sad that first time buyers are hoping for a crash. If that happens people will spend less causing the economy to falter and then some of them will loss their jobs. You can't have it both ways!
Nat, UK
My wife and have always planed to buy a house since we married, but not in the U.K. We intend to move to the U.S where land is cheap and we can build our own home without taking out a mortgage at more than 6 times our current income!
Kristian, UK
We bought our first house about 20 months ago and feared that it would be at the top of the market. It wasn't and now our house is worth 35% more. Nearly �50k! Rent is pouring money down a drain really. And there is a chronic housing shortage in the UK. But whether I'd have the guts to go for it at the moment I do not know. And that means only one thing. Self fulfilling doubts. First time buyers being too afraid will crash the housing market!
Martin, UK
I earn just under �40,000 and where I live I would have to get a mortgage of at least 4 times my salary to buy a run-down 2 bedroom flat. No hope at all of a house. I am seriously thinking of leaving the country because of this as the thought of forever renting doesn't really appeal to me.
Jason H, UK
I too am a recent graduate, and have just purchased my first home with little problem. I am by no means a high earner and am paying bills on my salary alone and although things are tight from time to time I'm not struggling. However, I live in the north east, where I think that house prices are a bit more reasonable and I count myself lucky that I do. It's by no means impossible for first time buyers to get on the property ladder, it all depends on where you want to live.
Janet, UK
After years of slogging and saving, we finally managed to buy our first house last month. Whatever happens next, it's a big relief to be on the ladder at last, but it's been an incredibly stressful 4 years, and it's an outrageous situation for young people to find themselves in. Good luck out there!
Alastair Stevens, UK
Yes, I am delaying buying my first property because I am convinced a crash is about to occur. If you want to see the evidence, consider this. I am currently in a house share in London, and we are having tremendous problems trying to let out one of the rooms despite the rent being cheap and in a desirable area. By contrast, when the same room was advertised 6 months ago, we were flooded with enquirers and had to turn lots of people away. Therefore, if the rental market is now in difficulty, then the housing market won't be far behind!
Chris, London, UK
There's going to be an almighty crash in the next couple of years, history will repeat itself. The same bullish attitude was expressed about equities during the dot com boom and look at them now!
Tom G, UK
I am planning not to until I have enough to buy outright |
I am planning not to buy a property until I have actually saved enough money to buy it outright, rather than taking out a mortgage. There cannot be a happy household that depends on borrowing and debt.
Anna, UK
I am surprised anyone can afford to buy a house these days. The properties are just not worth the money they are going for. On my current salary (which is just above the national average), the mortgage I could get wouldn't even get me a one-bedroomed studio flat in a tacky area of London.
Tabitha, London, UK
I'd love to have the choice. Surely it's clear to all involved that first time buyers no longer have the luxury of deciding whether or not to buy?
Katy, UK
I'm in a poverty trap |
As a single parent working part-time I'm basically in a poverty trap. Although my income on paper is pretty reasonable, as a large proportion comes from tax credits and maintenance, many lenders just won't entertain the idea - and certainly not in terms of 100% mortgages. The loan-value ratio is a huge problem in an area where houses sell for well over valuation. I'm wasting money renting when I'd be cheaper buying but the whole system would appear to be against you.
Nathalie, Scotland
I am paying in rent what I was earning in wages only five years ago. Just another example of the rich getting richer as the poor are getting poorer. Maybe I'll turn to crime!
Gary Fox, London, UK
Never mind buying, I'm having trouble renting a little flat for myself! I graduated last June and have been living at home with my parents. Now I've landed my first permanent job in York, on �16K, but would struggle to pay the rent on a one-bedroom flat or studio. It's hopeless for graduates - big debts, not enough jobs and nowhere affordable to live. I assume the lack of small flats to let is because so many other professionals are choosing to rent rather than buy.
Sarah, UK
Maybe it's time people spent more time with their family rather than moving out as soon as they can. Hopefully this will result in a better family life and value for the upcoming generations.
Basa, UK
In response to Basa's comments - some of us don't have the luxury of being able to stay at home for years after our maturity! Myself, I was asked to leave home as soon as I finished school due to family difficulties. I am now 28, single and unable to afford to take the first step onto the housing ladder as my salary (notional average)would not allow me to buy a studio flat near my work. I cannot save a large amount (Anna) as I am spending the majority of my income on rent. The housing market is so ridiculously high priced at the moment that my only hope of getting onto the housing ladder is to wait for the inevitable crash. The government should do something about this catch 22, they have put us into this situation.
Guy, Berkshire, UK
It would be financial suicide to buy on the limits of your borrowing powers |
As a graduate scientist my starting salary is �12-15K. The best area to live and work is Cambs/Herts/Essex but house prices here are too much for someone earning �25k needing a 100% mortgage. It would be financial suicide to buy on the limits of your borrowing powers. As a single person it is impossible to think about buying a house.
Louise, UK
Yes, we are delaying. In our area a one-bed flat is �175K. Even on an above-average wage my husband and I cannot afford that. However, we are noticing that there are large numbers of buy-to-let properties coming on the market. For example, a block of 75 apartments was built 18 months ago, and all were sold before it was even finished. 60% of the apartments are now either for sale or still empty so we're keeping our fingers crossed that the lower prices will come soon.
Jo, UK
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