2008 was a record breaker in terms of house prices – they fell by 15.9 per cent over the year, which is the biggest annual drop on record, according to a new survey by Nationwide…
2010 is being touted as the year in which we will see a return to normalcy in the housing markets. Experts have warned that this year we will witness further drops as significant numbers of buyers have yet to return to the market.
The failure to return to the market is due in part to concerns over job losses and also to the fact that many are hoping that prices will fall even further.
Recently introduced Government incentives and affordability measures will go some way to restoring consumer confidence and helping to boost the market, though a return to the dizzy heights of the property boom of the last few years remain a long way off.
Nationwide first began collecting house price data in the current format in 1991 and last year saw the biggest fall since their records began.
The average house price in the UK fell to £153,048 in December 2008, which was a £20,000 drop from December 2007. This house price was last seen as an average back in 2005.
Fionnuala Earley, Nationwide’s Chief Economist, said, “2008 has been a year of turmoil in the UK property market.
“The disruption in the financial markets worsened throughout 2008 and had larger implications for the real economy than we anticipated a year ago.
“This time last year we expected the housing market to cool quickly as affordability was poor and economic conditions looked set to weaken, but we did not anticipate the speed of house price falls or the extent of the global and domestic economic slowdown.
“Conditions remain highly volatile as we start the New Year, making it difficult to give a specific forecast for the year,†added Ms Earley.
The silver lining is that first time buyers who thought they were unlikely ever to get a look in at the UK housing market, are now returning in droves, eager to snap up their first home for a more affordable price.
Nationwide said, “There is likely to be significant pent-up demand from potential first-time buyers who had been priced out of the market since 2003.â€
For more information on international money and the market in general, please visit http://www.themovechannel.com/money/.
-ENDS-
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