House prices still set to fall in 2011

According to recent figures the property market in the UK did edge up a little over the course of 2010, and the average property price in December was up by around 0.4 percent compared to the same month a year earlier. The figures were released by High Street lender, Nationwide, with officials from the building society stating that despite this year’s slight increase property prices were still set to drop in the first half of next year.

Nationwide said that property prices in 2010 had declined in the second half of the year compared to the first half, and that in the first half of 2011 prices would continue to fall. Nationwide said that demand for property remained weak, which would contribute to the slump in property prices. One economist from the building society said that there were two few buyers interested in property and too many properties available.

The lender also said that although property prices had edged up in December, prices had fallen in four of the last six months and were likely to continue doing so. Property prices have been falling as a result of lack of mortgage availability, increased caution from potential buyers who are steering clear of the market at present, and an over-supply of properties for sale.

An official from Nationwide said: ‘At the moment, there are probably still too few buyers chasing too many properties. As a result, the slow drift down in house prices is likely to persist in 2011, at least for the first half of the year. Whether it continues into the second half will depend on the flow of new property on to the market.’

He added: ‘Despite December’s increase, house prices have fallen in four out of the last six months and it would be premature to suggest that the recent downward trend has been broken on the basis of one month’s figures.’

Tags: building society, Business and Economy, economics, result, mortgage, Irish property bubble, slump, Mortgage loan

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