What’s in store for UK house prices

It’s been a turbulent time for the economy, backed up by figures that confirmed Britain had entered a double-dip recession. The effects on the property market have been huge and hard felt by first-time buyers and those wanting to sell their property as asking prices soar to crippling levels and deposits double to 20%.

Banks and leading economists have warned of a worsening financial crisis and investment manager, David Kauders recently suggested that this is the start of a ‘slow-motion crash’ in the housing market, predicting that now mortgage credit has contracted so too will house prices. However, despite the doom and gloom coming from some experts, mortgage lender, Nationwide has more promising news with the average property price up £900 (0.5%) on December 2011. So are house prices back on the mend or are they set to plummet further?

Market reports say…

The latest insights from Nationwide show record increases in the average house price, taking a leap to 1.3% – the biggest monthly increase in more than two-and-a-half years in August. Prices were down by just 0.7% annually at an average of £164,729, as the pace of decline slowed considerably from the 2.6% annual fall recorded in July.

But the substantial monthly rise in house prices was delivered mainly by statistical manipulation, with the process of seasonal adjustment bumping up the more modest actual rise in the average house price. Without that effect house prices only rose by 0.2 per cent, as the average property recorded a £340 rise this month.

Government Land Registry figures for July indicated another bump in house prices, reaching 6.5% annually in London but stagnating elsewhere. While data revealed the average UK house price in July was £162,900, up from £161,777 the previous month, outside of London very few regions experienced any growth in house prices over the year.

Forecasts from the Centre for Economics and Business Research (CEBR) predict a 15% rise in house prices over the next five years, equalling an average annual increase of 2.8% over that period – a far slower rate than witnessed between the 1980s to 2000s.

The approach for home owners…

Financial experts have painted a very mixed picture with regards to the future of house prices. Rightmove says asking prices will rise just 2% in 2012, while Halifax predict a decline or rise either side of 2% so the message to homeowners is to be prepared for fluctuations and be realistic. Stay flexible on your asking prices if you want to guarantee a sale.

For anyone looking to move homes in the near future, you’re going to have to play the property game and do some serious negotiating to bring seller’s down to more reasonable prices.

Should you need a quick sale for your home, Jemima Poppy Property Consultants offer free expert advice for a guaranteed sale. To speak with one of our consultants today please call Jemima Poppy now on 07890 527046 or visit our website to see what else we can do for you and your home.