by Mark Johnston
The housing market is stuck due to a combination of prolonged mortgage rationing, home owners reluctantly willing to drop their prices and the gloomy economic news putting off potential buyers, all of which does not look to alter any time soon.
Falling incomes and higher unemployment are also putting households under further pressure, preventing many from moving home or forcing them to sell or else!
In 2011 according to some experts house prices dropped by approximately £6 a day. With the value of the average home dipping from £164,291 at the start of 2011 to around £162,095.
Most property commentators are simply predicting ‘more of the same’ for the coming year, in relation to the housing market.
In conjunction to this Mark Harris, chief executive o independent mortgage broker, SPF private clients said “looking forward, we expect 2012 to mirror 2011, which means a largely flat market with relatively low levels of transactions”.
The Council of Mortgage Lenders (CML) has also suggested that “the prospects for the housing market in 2012 are ‘highly uncertain’”.
Howard Archer, chief UK and Europe economist at HIS global insight has forecast that “house prices will fall by around 5% by mid 2012 as weak economic fundamentals outweigh extended low interest rates”.
Analyst experts expect house sales to stay low and perhaps even fall lower than in 2011.
Whilst we all know that the economy is in trouble, when it comes to house prices not every part of Britain will suffer equally. It seems the north looks set to be the hardest hit. While property is far more affordable there, potential buyers in the area are much more worried about their jobs and struggle to raise big deposits.
Some mortgage lenders have warned house sales in 2012 could hit the lowest levels recorded in over 30 years. These warnings come largely due to negative financial news which is potentially putting off home buyers from making purchases.
A spokesperson for the Halifax. Martin Ellis has recently warned that the housing market prospects for 2012 are ‘uncertain’ adding “if the UK can avoid recession, we expect broad stability in prices”.
Although other experts believe that with so much economic uncertainty at present there could be a considerable variation in either direction.
The Royal Institution of Chartered Surveyors (RICS) predicts that the number of homes sold in the UK will rise to roughly the same level of activity as seen in 2010, however property prices will struggle to follow suit.
While the recent government housing initiatives could help to boost the proportion of houses purchased, it will only make a difference to a small sector of the property market, in particular first time buyers purchasing new build properties.
While falling property prices bring tough times for some through negative equity and repossession, there are others who are pleased that prices may fall further such as first time buyers and those wanting to move u the property ladder.
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