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House Prices Drop £10K in Two Years


The latest house price figures to come out of the Halifax show a drop of 2.4% in April.  This leaves the average house price at £159,883, which is the same level as in August 2004.  If these figures are accurate, the average home has lost £10,000 pounds in value since April 2010, where the market seemed to have bounced back from its 2008/2009 slump.  In a market full of contradictory figures, when taking the 2.4% rise, cited by Halifax for March, into account, the more stable quarterly figure ends up at a rise of 0.3% - i.e. relatively unchanged.

However, property value is down 0.5% on one year ago, and homes are worth £40,000 less than they were at the August 2007 peak.  One of the other big lenders, Nationwide, said that the average house price has fallen by 0.9% over the last twelve months, after citing a 0.2% fall for April & the fourth drop in five months.  Indeed, the Nationwide has said that housing stock will continue to stagnate and fall in value this year, as householder confidence lags behind any potential economic recovery.

Commenting on the Halifax figures, housing economist Martin Ellis said: Despite the slight improvement in the underlying trend in recent months, house prices continue to lack real direction, with the current UK average price little different to where it was at the end of 2011.  The ending of the stamp duty holiday in late March has boosted house sales in the first quarter of the year and, according to the Halifax, has probably contributed to the general volatility of house prices.

Other experts share the general pessimistic prognosis for the remainder of the year; IHS Global Insight, for example, predicts a further 3% fall.  This is based on the theory that the economic fundamentals that support the housing market are looking weak; unemployment is high, earnings growth is muted and the outlook uncertain & and no one expects any of these factors to improve anytime soon.  Add to this, the fact that potential home owners are facing tougher hurdles to obtain a loan, and availability is expected to decrease further in the coming months.


Sources: thisismoney.co.uk, lloydsbankinggroup.com (image courtesy of telegraph.co.uk)