UK house prices touch August 2004 levels

Posted under General by Jermaine

Halifax has reported continuous fall in house prices, reaching levels of August 2004. In December prices declined by 2.2%, amounting to fall of 16.2% from December 2007, biggest since Halifax started compiling data.

A home in the UK is now costing average £159,896. Although first-time buyers stood good chance of buying a home on account of falling prices; obtaining a mortgage without heavy deposit is still biggest problem.

Majority of first-time buyers are bidding time in the hope that prices would still fall further during 2009.

The Royal Institution of Chartered Surveyors had forecast that house prices will decline by additional 10% in 2009, meaning cumulative fall of 25% from peak-to-trough.

According to the Bank of England, mortgage approvals came down to 27,000 in November, touching lowest number since 1999.

Analysts point out that unless mortgage lending resumed normal levels, slowdown in the UK property market will continue to prevail for sometime, although Halifax highlighted that market was stabilising but at a low level.

Chief economist of Halifax, Martin Ellis, believes that housing market will remain subdued this year due to unavailability of mortgage funds.

High volatility of market has forced Halifax and Nationwide to discontinue issuing house price forecasts for the current year, although Halifax will continue with monthly monitoring of price index.

The Council of Mortgage Lenders will also not be making forecast of house prices in 2009 due to prevailing uncertainty in the market.

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