House Price Update to 24 November 2010

UK House Prices Situation: Prices weakening in many areas

UK House Prices Forecast: Further falls likely in most areas

Nationwide Expects Further Falls

One of Britain's largest mortgage lenders, Nationwide, has said that it expects to see further falls in house prices as government spending cutbacks cause uncertainty and prevent potential buyers from committing to a deal.

Nationwide's chief executive, Graham Beale, told the BBC that housing market conditions had "weakened noticeably over the last six months" and that both buyer demand and house prices had declined.

Beale said that he did not expect the Bank of England base rate to change "until late 2011". According to the latest Nationwide House Price Index, average house prices have fallen 3% since June.

However, Nationwide does not expect the fall in house prices to be as dramatic as in 2008, as continuing low interest rates mean that mortgage payments tend to be lower than they were then, reducing arrears.

UK House Sales Down 11% On Last Year

According to new figures from HM Revenues & Customs, house sales are down 11% on this time last year. In October, 79,000 residential properties were sold in the UK – 10,000 fewer than in October last year.

Although October did see a rise of 1,000 on September, the overall trend of declining volumes suggests that house prices and sale volumes are now coming under pressure from wider economic factors such as fear over public spending cuts and more stringent mortgage lending standards.

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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