The average price of a new home is now £195,166, 9.26% less than at the peak of the market in October 2007 when the average price was £215,089.
House Price Watch is an analysis of house price data from CLG, LSL Acadametrics, Halifax, Nationwide and Rightmove, giving a comprehensive overview of the UK property market and a more accurate and less volatile picture of house price trends.
Stuart Law, Chief Executive said:
"Property prices were relatively flat in 2011, recording a nominal annual price fall of -0.1% in December which translates as £268 in monetary terms. This lack of growth can be attributed to poorer job prospects, with unemployment now at its highest level since 1996 according to the ONS, and the ongoing Eurozone crisis which is impacting confidence and making lenders more cautious. The year ended, however, with the usual market slowdown rather then necessarily reflecting any sudden decline in confidence and we await the Spring bounce.
“However, key locations such as London and other major towns and cities where there is a sound infrastructure and good employment rates, will have seen prices edge upwards over the year as demand continued to outstrip supply. Regional and local price variations are likely to become more pronounced this year as budget cuts continue to take hold but we expect to see national growth of as much as 3%, buoyed by strong performing areas.
“Increased funding and competitiveness in the mortgage market has resulted in a growing number of affordable products on better terms. We expect this trend to continue, with buyers also keen to take advantage of historically low interest rates which are unlikely to rise over the short or medium term. Investors in particular are returning to the market in significant numbers. Although some landlords have seen minimal capital growth on their investments in the last few years, they look set to continue to benefit from strong rental yields.
“However, there is some uncertainty surrounding the ongoing Eurozone crisis, which has the potential to have a significant impact on UK banks, limiting the amount they are able to lend and resulting in a further tightening of lending criteria and mortgage availability. Fears that the UK is about to enter another recessionary period following a -0.2% contraction in the economy in the last quarter, will put further pressure on prices.”
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