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Homeowners still believe house prices will fall in 2009

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by Kay Mitchell
Homeowners still believe house prices will fall in 2009

Newly-established online property group, Simplyzigzag.com, has revealed that 45% of homeowners believe their property will lose 10% in value or more next year.

The company’s poll of 560 homeowners, which was conducted on its website during July, also revealed that 21.4% believe their home will suffer a loss of 5% or more while 17.9% believe prices will remain stagnant.

The survey comes after property prices fell 1.7% in July, according to the latest Halifax House Price Index showing that the housing slowdown is gathering pace.

Many economists have indicated that property prices could fall by around 20% during 2008 and 2009, which is possibly why nearly half of the homeowners surveyed also believe property prices will continue to fall.

Earlier this month, the Bank of England reported that the number of new mortgages approved for house purchases has fallen by 68.4% in the year to June – the lowest level since records began in 1993.

The Bank said mortgage approvals fell from 41,000 in May to 36,000 in June. The number of mortgages approved has now fallen for 14 consecutive months.

It is, therefore, no wonder that many believe that 2009 will be gloomy. Achim Amann, director at Simplyzigzag.com, said they are seeing sellers taking their property off the market and where possible, trying to remortgage instead of adopting a wait and see approach.

According to Mr Amann, the remaining vendors are very motivated and are responsible for the severe falls in property prices while the amount of transactions is also falling.

Consequently, estate agents are suffering the most currently and a lot of branches will close, explains Mr Amann.

Mr Amann went on to say that the homeowner-confidence survey is part of a self-fulfilling prophecy that will only change when mortgages will be made cheaper for those prospective buyers eager to snap up a bargain.

However, in contrast the belief that property prices will fall, over 1 in 6 believe prices will actually rise next year, while 9.8% feel there will be a 5% or more increase in prices and 6.3% are hoping for 10% or more.

Achim Amann continues that prices will recover once the cost of credit and loan-to-value rates recover.

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News posted: August 11, 2008

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