House Prices Fall

by Mark Johnston

According to recent research from the property website ‘sellers are taking record amounts off their properties’ as the housing market continues to stall.

The website states that a third of all properties that are currently on sale at the moment have had their asking price cut, which equates to around £2.5 billion across those homes.

Prices fell by 0.9% over the last 3 months of 2011 and this is 1.8% lower than they were at the same time in 2010.

Research has shown that the average UK asking price discount is around £19,580. This is an all time record and £1,105 higher than it was at the same time in 2010.

Official data showed that the North West of England was the only region of the country to see house prices fall in January 2012; the region includes places such as Stockport, Chesterfield, Scunthorpe and Wakefield, when the average UK property actually increased in value by 1.1%.

The Halifax’s latest house price index suggests that house prices rose by 0.6% in January 2012.

A recent property survey has shown a ‘surprisingly strong’ spring bounce for the housing market. However, this boost is an artificial one and could be in part due to the nearing end of the stamp duty holiday in March meaning many first time buyers are rushing to get on to the property ladder.

According to the latest figures from property analysts Hometrack house prices were flat in February 2012, in England and Wales.

The property website house price survey said that the average property asking price for February was £233,252 compared to £224.060 in January. This month on month leap is the largest price change seen in the second month of the year since 2002.

There was also a 10% increase in the number of homes on the market in February; however, an overall lack of supply over recent months is keeping prices steady and will it seems continue to do so in the short term.

Although the longer term picture for house prices is not looking good, events in the euro zone and any repercussions for the UK will determine how well house prices fare in the immediate future.

Nationwide expects prices to ‘move sideways or only modestly lower’ in the month ahead. They cite concerns about the labour Market and the general state of the economy as factors that are likely to hold prices back.

Martin Ellis, Halifax’s housing economist, said “if the UK can avoid a prolonged recession, we can expect broad stability with in house prices in 2012”.

Although many believe that the ‘long term picture is not so good’ that is of course unless you own your own property purely as an investment, then a fall in prices from the current level would in fact be very good.

All this said it is worth remembering that the nature of housing is such that a completely accurate calculation of price changes is not entirely possible.

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