Forex Blog

December 28, 2010

UK house prices to continue their decline in 2011

UK house prices fell for a sixth month in December and will extend their decline in 2011 on “weak” demand and tighter mortgage-lending conditions, Hometrack said on Monday.

The average cost of a home in England and Wales dropped by 0.4pc during the month, according to the housing intelligence group.

The drop was driven by the ongoing shortage of buyers, with estate agents reporting a further 4.8pc fall in the number of people registering with them in December, the sixth consecutive monthly decline.

Richard Donnell, director of research at Hometrack, said: “The seasonal slowdown which began at the beginning of November continued apace into December.”

Overall, the group said house prices had fallen by 1.6pc during 2010, with property values ending the year at a lower level than they started it in 71pc of England and Wales, although they were higher in 15pc of areas – mainly in London and the South East.

Mr Donnell said: “Looking ahead we expect house prices to remain under downward pressure in the first half of 2011 on the back of weak demand although we expect the supply of homes for sale to shrink as vendors withdraw from the market or reduce pricing to a level where property will sell.”

Telegraph UK

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