Research shows house prices to fall by £8000 this year
January 9, 2008
According to recent research house prices in the UK are set to fall by an average of £8000 over the course of this year. The research was carried out for the Daily Telegraph and indicates that there will be a minimum drop of £8000 in the average house price in the UK, with a 4% fall expected. If these predictions come true this will be the first annual fall in fifteen years. This adds further fuel to the many predictions that have already been made in relation to falling property prices.
According to industry experts affordability at present is 12% worse than it was this time last year. First time buyers have experienced particular problems over recent months when it comes to getting onto the property ladder, as rocketing house prices coupled with high interest rates have made it increasingly difficult for those with no previous equity to raise the money that they need to afford a home.
If house prices do fall as predicted, with £8000 being knocked off the average property price, first time buyers could find that property is more affordable, although the ongoing credit crunch could still mean that first time buyers experienced difficulties when it comes to finding a suitable and affordable mortgage.
One industry expert stated: “We currently expect house price falls of three to four per cent. I think life will be worst in London. A four per cent fall would take some £8,000 off the value of the average home of around £200,000.”
In addition ot house prices coming down over the course of 2008, interest rates are also set to fall further this year following the first rise in two years, which took place early in December. Another two or three interest rate cuts are expected for the coming year.
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