House Prices Decrease as Concerns about Recession Increase

Thu, 29 Jul 2010

Economists have forecast that prices may fall a further 20 per cent should confidence in the market not pick up.

Average values fell 0.5 per cent in July, lowering the annual rate of decline to 6.6 per cent from 8.7 per cent the previous month, so the most recent figures from the Nationwide demonstrate.

Nationwide figures show that the cost of an average home in the UK is £170,000.

House prices are predicted to flatten during 2010 and could fall further in 2011.

The most recent drop is due to a lack of buyers, detered by increasing high unemployment and the financial overstrech on household budgets.

Another drop of 5 to 10 per cent in house prices is considered highly possible in 2011.

Capital Economists suggest house prices remain 20 per cent too high.

As fiscal policy tightens, levels of repossessions increase and mortgage lending criteria begins to tighten once more, buyers going to remain far and few between in the year or so.

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