UK House Prices Situation at 28 9 2007: Rapidly slowing growth with some falls

UK House Prices Forecast: No real-term growth over the next year, falls possible

House Prices Falling - Rightmove

Property website Rightmove's latest house price index has shown that average house prices across most of England and Wales fell in the month from 12th August - 8th September.

The average asking price was down 2.6%, but this figure disguises wider regional variations, with one region actually seeing price growth last month:

• South West: -4.1%
• South East: -3.3%
• Yorkshire & Humberside: -3.1%
• East Anglia: -3.0%
• East Midlands: -2.8%
• North West: -2.8%
• Greater London: -2.5%
• North: -0.5%
• Wales: -0.2%
• West Midlands: +0.9%

The fall in average asking prices has led to Rightmove's annualised measure of house price inflation falling from 12.8% to 9.6%. This suggests a trend that is in line with most analysts' expectations of house price growth falling to inflation levels for the next year or so.

1 in 10 Chance of Serious Crash

The Royal Institution of Chartered Surveyors (RICS) has said that it believes there is a 10% chance of a serious fall in house prices over the next year, with London house prices particularly at risk.

RICS have also lowered their house price growth forecast for the next 12-15 months. Where previously they were expecting growth of around 3%, they now believe that there will be no growth in house prices in the next year.

Mortgage Lending Down In August

The total value of mortgage approvals fell by 25% last month, according to new figures from the Building Societies Association. This data provides further indication of falling demand and activity in the housing market.

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