Are house prices set to rise or fall? Money writer Neil Faulkner looks at whether property-market forecasts can be trusted.
Fathom Consulting, a think-tank headed up by a former Bank of England economist, has said that house prices could rise 30 per cent over the next two years.
The consultancy ran two simulations of the future: the first showed a huge price rise if the government's Help to Buy scheme fuels more buying with lower deposits.
The second simulation showed prices would still be 10 per cent higher by 2015.
These are promising predictions if you're looking for reasons to buy.
But Fathom's dramatic forecast loses its credibility somewhat when you consider that only last August it forecast a 30 per cent fall in house prices.
It said this fall would come about if the government pressed ahead with a major, publicly funded house-building programme.
However, even without unforeseen events messing with your forecasts, they can go wrong, so let's look at Fathom's record.
Fathom's 2011 house price forecasts
In early 2011, Andrew Brigden, Fathom's chief economist, thought house prices were 20 to 30 per cent too high.
He said: "I think the correction will come at some point, even if interest rates stay where they are."
He sensibly hedged his bets, saying prices might stay flat instead and wages will rise to support them.
This has pretty much been the result, according to the Office for National Statistics (ONS), which measures changes in house prices.
2010 property price predictions
There was a drop in property auction prices in February 2010, and Brigden said this was consistent with another downward leg in the wider market.
In March 2010, Fathom predicted a 5 per cent fall in 2010 and a 10 per cent drop over 2011.
But ONS figures show there was a 3 per cent rise in 2010 and a fall of a fraction of 1 per cent in 2011.
Fathom also forecast a decade of flat or falling prices, in stark contrast to its most recent prediction.
Fathom's 2009 forecasts
In August 2009, Fathom's Danny Gabay said falling property auction prices were a clear signal the wider market would fall.
However ONS figures show the opposite result.
Gabay was quoted in the Financial Times in May 2009 saying: "House prices have fallen rapidly already, but the exceptionally low level of transactions suggest that they have much further to go."
On the contrary: house prices rose almost continuously, ending around 10 per cent higher one year later, according to the ONS.
House price forecasts 'far from a precise science'
So it seems that Fathom's forecasts may not be that reliable, but they're no worse than the 44 other property price predictions I have studied.
David Hollingworth of mortgage brokers London & Country says: "Forecasting is far from a precise science.
"Potential buyers are likely to be able to find a broad range of different forecasts.
"They may choose to pin their colours to a particular mast, especially if it backs up what they themselves think or hope, but ultimately no-one can really know how prices are going to perform."
Don't dismiss forecasts altogether
However, despite their unreliability, Hollingworth doesn't dismiss forecasts altogether.
"Forecasts as a whole may help flag up the issues affecting the housing market, positive or negative," Hollingworth says.
"That could help someone make the decision of whether now is the right time to buy."
And Hollingworth offers more pragmatic guidance, suggesting you buy a property to serve you well at least for the medium term.
He says: "if buyers can manage to find the right property at the right price to ensure it will be affordable, then short-term fluctuations will have less of a bearing."
What do you think?
Are you looking to buy or sell? Do you pay any attention to house price forecasts?
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