Is the current UK house price slump a good thing or a bad thing? Article Published: 07:57 01/09/2008 Article Classification: Kalamon Fund
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More people want house prices to fall than to rise, BBC research has found.

That is the surprise finding of the first poll to test the assumption that house price falls are unpopular and therefore politically damaging.

Barely a fifth of people want house prices to rise - fewer than the number of people who want them to fall.

Olive Tree's Richard Brady said "We have been talking about a slowdown in the UK market for over two years now, most professional investors would have expected this to happen. Property growth is cyclical and we are now in a buyers market in the UK." He added "We decided about 18 months ago to set up a fund to take advantage of the current conditions. Certainly buying at discounted prices now and holding for 5 years is a sound strategy, particularly if you spread the risk across a number of countries."

A decline in prices affects those people that are looking to move house now or have highly geared borrowings on their main residence or property portfolios.  A recent report from the Nationwide suggested that UK prices have dropped by around 10% over the 12 months to August 2008, whilst conversations with estate agents will paint a more bleak picture; especially in Northern Ireland.

According to the National Association of Estate Agents NAEA, 120 estate agency offices per week are currently closing down in the UK and property sales completions are at the lowest level since the early 1990's.

No doubt, the savvi investor will be looking to use their 'vulture tactics' to buy from the more desperate sellers in the marketplace and there are plenty of deals to be found.

The poll commissioned by the BBC of over 1,000 people, found that only 22% said they wanted prices to go up while 28% said they wanted house prices to fall.

Nearly half of the people who responded, or 46%, said they wanted them to stay the same. The findings cast doubt on whether the political and economic damage done by falling prices is as serious as has been feared.

The poll was commissioned after makers of the BBC2 TV series The Truth About Property came across a surprisingly large number of people who wanted house prices to drop.

For more information about this article please visit www.bbc.co.uk

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