City traders still see dismal future for house prices
Technically you can buy a house in five years’ time at less than you’d pay today. That’s if you have enough cash to trade in the residential derivatives market.
Future HPI, an index of residential derivatives trades put together by Peter Sceats & Associates, puts the average price of a house in May 2016 at £161,498, measured against the Halifax non-seasonally adjusted average price. That average price in May this year was put at £162,344.
But between then and now those betting on the future path of house prices are looking at a curve that sees a fall of about 5.5% in the coming 12 months and a fall of 7.5% in two years’ time.
From then the curve starts to rise gently again.
But even in ten years from now the market reckons that house prices in cash terms will be more than 7% below the peak they reached in August 2007.