A mere 10% to go on UK house price falls

| April 10, 2009 | 2 Comments
A mere 10% to go on UK house price falls

There was a time when the thought of UK house prices falling 10% would hardly have been cause for celebration.

However, credit crisis Britain will be cheered by the latest report from the Centre For Economics and Business Research (CEBR) which predicts that prices will bottom out after a further decline of 10%.

The think-tank is hopeful that a combination of low interest rates, lower house prices and improving credit conditions will call time on the plummeting value of the average UK home.

According to Halifax, this stood at £157,326 at the end of March, around £30,000 less than a year earlier.

The CEBR forecast takes into account Bank of England figures showing that new mortgage approvals rose 19% in February, to 37,000.

It concludes that if the trend continues and approvals hit 50,000 a month by the end of this summer, house prices could bottom out by the beginning of 2010 having lost a further 8% to 10% but with the rate of decline slowing down.

A less likely scenario involves new mortgage approvals rising to 60,000 or 70,000 a month which could mean prices bottom out between June and September of this year.

Estate agents and others have already noted tentative signs of recovery in the market.

New buyer enquiries are rising and the latest Nationwide house price index contradicted figures from the Halifax, showing a 0.9% month-on-month increase in the average cost of a home in March.

Analysts at CEBR are, however, cautious describing the market as remaining “on a knife edge”.

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Comments (2)

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  1. derek bilston says:

    Really. Well Estate Agents always like to talk prices up. But the reality is that a depression is coming and not just for house sales. There may be some movement in the more highly sought after type of property. But most people are in a debt situation that is not just going to go away that easy.

  2. matthew says:

    I assume these so called experts are also those who told us a couple of years ago that house prices were going to hit three or four hundred thousand pounds across the country? With unemployment predicted to rise, pay deals at record lows, fiscal stimulus only going so far and interest rates only to be held at their disgustingly low levels for so long, if people fall for this latest round of tripe then they are even more ignorant of the facts than I thought. Why would it be so good if house prices remained at these inflated overvalued prices? Everything must look so wonderful through those rose tinted glasses…Fact is, house prices will continue to fall to a level where people can afford to buy them…if they choose. Banks will not lend at those stupid multiples again, no matter what Gord and the other joker tell them to do….we have another 25-30% of falls to come until we get to a level where people can buy a ‘HOME’. So pack up your laminate flooring, your amatuer buy-to-let hand books, kirsty and Phill re-runs, and hop it…Spin, Spin and Spin again jokers

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