House Price Update to 8 December 2010

UK House Prices Situation: Market slowing in many areas

UK House Prices Forecast: No growth likely, falls possible in regions

Prices Down 0.7% In October – Assetz

House prices fell by an average of 0.7% in October, according to new figures published by property investment company Assetz.

The Assetz house price index is unusual – it combines all five of the major house price indices (Halifax, Nationwide, Rightmove, DCLG and LSL Academetrics) to form a 'super index'. In theory, this approach should smooth out the variations that show up in the individual indices and provide a more reliable measure of house price movements.

According to the Assetz figures, house prices are now 6.77% below the peak of the housing market boom. The six-month annualised rate of growth (the rate of growth if the monthly change was sustained for 12 months) has slowed to just 0.36% - pretty much nothing, in real terms. Despite this, house prices are up an average of 3.6% on October 2009.

According to Assetz, the latest figures show that UK house price growth is slowing to a "more sustainable level". Assetz Chief Executive Stuart Law believes that "in spite of small fluctuations in the monthly data there is an underlying trend towards house price growth. We believe this is set to continue in 2011."

It is certainly true that the mini-boom seen in 2009 was unsustainable, but many analysts believe that the current downward trend will continue until house prices have fallen a little further. Assetz's more optimistic position is an interesting contrast – the next 3-6 months should reveal whose forecast is correct.

Hometrack Figures Show 0.8% Fall In November

The latest house price figures from property information service Hometrack show that UK house prices fell by an average of 0.8% in November. Prices fell in 54% of postcodes and the average proportion of the asking price being achieved in sales fell to just 92.4%, the lowest level since September 2009.

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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