Further house price falls ‘inevitable’ - Mortgages - News - Moneyfacts


Further house price falls ‘inevitable’

Further house price falls ‘inevitable’

Category: Mortgages

Updated: 02/11/2010
First Published: 02/11/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

House prices declined at their steepest rate for nearly two years in October, and further falls have been described as 'inevitable'.

Property prices fell by 0.9% last month, the most marked drop since January 2009. The extent of the price dip was felt across more than half of England and Wales, with falls reported in 56% of agents, figures from Hometrack show.

In August and September, just 30% and 34% of agents reported a fall in prices, suggesting the housing market slump is becoming more widespread. The falls seen in October were the most widespread since February 2009, although they fell well short of the 75% high recorded two years ago.

It is the fourth month in a row that prices have fallen, with an oversupply of property – the number of homes on the market has grown by 14% over the last six months, while demand has fallen by 8% - partly to blame. It marks a change from earlier in the year when a lack of housing had helped prop up and inflate prices.

"Further price falls are inevitable in the run up to Christmas and are likely to continue into the first half of 2011," commented Richard Donnell, director of research at Hometrack.

"The mismatch between faltering demand and increasing supply looks set to continue with the re-pricing process is likely to be drawn out into the first half of 2011.

"A stand-off is beginning to emerge between buyers waiting for prices to fall further and sellers being unrealistic on what they are willing to accept."

It is also thought that already low transaction levels will decline further. The one silver lining is that a modest adjustment to prices will take place, rather than a return to double digit falls that were apparent in 2008.

Find the best mortgage rate - Compare Best Selling mortgages

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Does your mortgage lender owe you money?

Earlier this week, the financial watchdog revealed that hundreds of thousands of mortgage holders could have been overcharged by their lender. Are you one of the many who could be in line for a windfall?

Do you think your home will rise in value?

There’s been a lot of talk recently about the rate of house price growth slowing, but is it affecting your personal expectations? According to research, it could be, with fewer people now expecting the value of their property to increase.

Confidence among “second steppers” is on the rise

We all know how difficult it can be taking that first step on the ladder, but what about the second step? In many cases, getting onto the next rung can be just as challenging, but happily, confidence among this cohort appears to be on the rise.