Tweet
Property prices in the UK fell by 10.2% in 2008, official figures showed today.
According to the communities and local government department, house prices fell by 2.3% during December. The average home now costs £195,317 compared with £219,591 in the same month in 2007.
House prices fell across the UK in 2008. The steepest drop was seen in Northern Ireland where they fell by 17.9%. In England prices fell by 10.4% and in Wales they fell by 10.3%. Only Scotland saw a single digit drop, falling by 6%.
The government figures come as surveyors announced they had seen an increase in buyers returning to the market in the hope of finding a bargain after the recent price drops.
The Royal Institution of Chartered Surveyors (Rics) also said today its members had reported an increase in the number of new buyers for the third month in a row – the first time this has happened since the end of 2006.
Just over 70% of Rics' members said the increase in buyer interest was down to a fall in property prices, and almost half said they thought buyers were beginning to believe the bottom of the market was close.
The majority of interest came from current owners looking to move house, while buy-to-let investors were also beginning to look at properties. Only 23% of Rics' members said they had seen an increase in interest from first-time buyers. Faced with demands for larger deposits only three mortgage lenders now offer deals to people with a 5% deposit, while one in four mortgage products require a deposit of 40% or more.
Research from the Intermediary Mortgage Lenders Association also showed that 58% of first-time buyers were unable to get a mortgage through their broker during the final quarter of last year, although in half of these cases this was because the most suitable product was not available through intermediaries.
Downward expectations
Yesterday the property site Rightmove said new sellers had come to the market in February with asking prices 1.2% higher than in the previous month, a decision commercial director, Miles Shipside, called "falsely optimistic" in the current climate.
Simon Rubinsohn, chief economist at Rics, said: "Interest from owner-occupiers is likely to persist over the coming months as those with large deposits look to capitalise on the drop in house prices. However, a sharply deteriorating employment picture may eat away at this improvement in sentiment, pushing potential buyers back to the sidelines.
"To prevent this happening and help restore an orderly housing market, the government urgently needs to address the issue of the availability of mortgage finance. It is essential that guarantees for residential mortgage-backed securities are introduced sooner rather than later."
Howard Archer, chief economist at IHS Global Insight, said: "Latest survey evidence indicates that buyer inquiries are now picking up significantly as people are attracted by lower house prices and the Bank of England slashing interest rates."
But he added he was sceptical this would lead to an increase in actual sales anytime soon, and he expected house prices to continue to fall for some considerable time to come.
"Many people are likely to be looking at houses pretty casually and will probably be very cautious about committing to buying a house in the current economic environment. Consequently, only a major bargain is likely to tempt them into actually buying a house," he said.
guardian.co.uk © Guardian News & Media Limited 2009 | Use of this content is subject to our Terms & Conditions | More Feeds
More...
