UK House Prices Situation: House prices down around 15% since Jan '08

UK House Prices Forecast: Further falls of perhaps 10% in 2009

House Prices - 2008 Year-End Figures

The UK's two biggest mortgage lenders - Halifax and Nationwide - both ended 2008 with roughly the same conclusions:

Halifax: 16.2% annual fall in 2008
Nationwide: 15.9% annual fall in 2008

The Land Registry annual fall of 12.2% is consistent with these figures, as it only goes up to the end of November (Land Registry figures track completed sales and so lag behind mortgage lenders' figures.).

Rightmove found that asking prices only dropped by 6.3% in 2008 - but all this confirms is that sellers have been very reluctant to lower their initial asking prices. However, as shown by the Nationwide and Halifax figures, sellers have been accepting offers far below their asking prices.

Many estate agents are reporting that sellers are accepting offers as much as 20% below their asking prices in order to secure a sale.

House Prices in 2009 - What's Next?

Most analysts agree that 2009 will bring further house price falls before the bottom is reached - either late in 2009 or early in 2010.

Rightmove's Miles Shipside says that 2009 is likely to be "the year of the deal" for property buyers with large cash reserves who are ready to move. Unfortunately, many of the deals are likely to be "at the expense of personal distress" due to an inevitable increase in the number of forced-sales.

Nationwide and Halifax agree with this forecast, in more guarded terms. Both have declined to publish their usual 'year ahead' house price forecasts in 2009. Halifax chief economist Martin Ellis says that he expects "further downward pressure on the market over the coming months".

Nationwide's Fionnuala Earley commented that "all of the typical affordability measures are still above their long-run averages. This suggests that prices have further to fall before significant numbers of buyers will be willing to return to the market."

Read about UK House Price indexes / key statistics that track the ups and downs of house prices

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

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