House Price Update to 17 August 2011

UK House Prices Situation: House prices down on year but stable over summer

UK House Prices Forecast: Further falls likely this autumn/winter

Government Figures Show House Prices Up 0.6% in June

The latest government figures, published by the DCLG, show that the average UK house price rose by 0.6% in June. However, the average house price has fallen by 2% so far this year and the latest figures from property listing website Rightmove suggest that there may be further falls to come.

Of all the UK countries, England has fared best this year – house prices have fallen by just 1.8%. Falls in the other UK countries have been larger: -5.6% in Wales, -2.3% in Scotland and -8.1% in Northern Ireland. Indeed, even one a regional level the picture was almost completely negative – only London has registered an increase in average house price over the last year, with the average price paid up 1.5% since June 2010.

The average house price paid by first-time buyers is 2.2% lower on average than one year ago, while the average house price paid by former owner occupiers is 2% down on a year ago – demonstrating that actual sale prices are edging downwards in most areas of the UK.

New house builders seem to be managing to maintain their margins and keep up with inflation; the average price paid for a new build was 3.2% higher in June 2011 than it was a year ago. The average price paid for a pre-owned dwelling was down 2.4%.

Rightmove Figures Show Sellers Cutting Asking Prices

The latest house price index from property website Rightmove show that home sellers are continuing to cut their asking prices; the average asking price fell by 2.1% in August, following a 1.6% fall in July. The result of these two consecutive months of falls is that the average asking price is now 0.3% lower than in August 2010.

House price transactions remain limited, at just 30% of their peak 2007 levels. Miles Shipside, Rightmove's Commercial Director says "In many parts of the country transaction levels are limited to the number of sellers who are willing to price aggressively below the competition and can afford to do deals."

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

.