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Record breaking house prices
2008 was a record breaker in terms of UK 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 3153,048 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 housing
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.
Latest falls
Christmas cheer was sorely lacking in the UK housing market
in December 2008, when the average cost of a home fell by a further 2.5 per cent, blowing the belief that
November's minute fall revealed stabilization in price falls out of the water.
Britain's
biggest mortgage lender, Halifax,
said last week that house prices had fallen by
16.2 per cent during the final quarter of 2008 compared with
the same period of 2007.
Prices fell by more than 15 per cent last year in London, the surrounding
area and the South East.
Scotland
fared best, with homes losing just 8.1 per cent of their value.
These falls come despite the fact that the Bank of England cut interest rates
to two per cent in a bid to boost the ailing market.
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."
Picture by asterisco
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