House Price Update to 29 December 2010

UK House Prices Situation: Lacklustre market likely to continue

UK House Prices Forecast: Some slippage in 2011 but no major drops

2010: House Prices Down In 71% Of Postcodes

House prices have fallen in 71% of postcodes in 2010, according to the latest figures from property information service Hometrack.

Overall, average house prices have fallen by 1.6% in 2010, with December seeing an average decrease of 0.4%, following November's 0.8% fall. However, these national averages mask stark regional trends. In 15% of postcodes – principally London and the south east – average house prices are higher than they were at the beginning of 2010.

Hometrack's figures show that December saw a 4.8% fall in the number of new buyers registering with estate agents, along with a 1.5% fall in property listings. More positively, sales agreed rose by 1%, although the average time on the market rose from 9.8 weeks to 10 weeks and the average percentage of the asking price being achieved fell from 92.4% in November to 92.1%.

Just 0.8% of postcodes saw a price increase in December, while 36% saw a decrease in average house prices, with the remainder not seeing any change.

Predictions For 2011

Hometrack believes that 2011 will see house prices fall by an average of 2% and says that it expects to see "house prices tracking sideways for the foreseeable future." It says that "weak demand and falling supply" will continue to be a problem while a "lack of mortgage finance" is a trend that will continue into 2011.

In a separate poll carried out by the Financial Times, 50 of the 56 economists questioned said that they expect to see house prices continuing to fall in 2011, although some emphasised that this could be a good thing, as UK house prices remain fundamentally too high. Citi's chief economist, Willem Buiter, said "Anything that reduces UK house prices has to be a good thing on balance."

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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