Average House Prices Falling by 2.2% a Month.
Both the Nationwide and Halifax’s house price indices are showing rapid and continued falls in property prices.| Latest Index | Average Prices | Oct Prices | Last Year |
| Nationwide | £176,500 | -2.2% | -14% |
| Halifax | £174,136 | -1.5% | -13% |
Average sale prices have fallen continually over the past year which has had a massive effect on both home buyers and sellers.
On the face of it lower house prices are good for home buyers. However the falling prices have coincided with the credit crunch so many first time buyers are struggling to secure mortgages and are so unable to get on the ladder. Also in reality most of the UK property market is based on a chain of transactions, as most buyers also have a property to sell. These homeowners are unable to sell their current home so the whole market has ground to a halt.
Although there are individual and regional variations the price falls have affected the whole country and all property types. There is just no escaping it. Most home owners have made the decision to stay put but there are many who have no choice-they have to sell.
The advice to anyone who needs to sell in this market is to be realistic and try to sell quickly before prices fall further.
For example if your house is worth £250,000 now and it takes you 6 months to secure a buyer your homes value could fall by £30,000 in that time. Therefore you need to make sure you get on the market at a realistic price and don’t waste time at over optimistic level.
If you already have a sale agreed to a committed buyer you are to some extent immune to these changes as long as the buyer doesn’t re-negotiate or sale abort. Unfortunately this is now extremely common and if it does happen you need to be aware of the changing market conditions and revise your asking price and expectations accordingly.
Obviously the current market is presenting opportunities for some. First time buyers who can secure a mortgage are finding affordability levels improving for the first time in years. And home owners lucky enough to find a buyer for their property are able to negotiate good discounts on their onward purchase. We call this concept Sell Cheap to Buy Cheaper and more info can by found on our website.
We expect prices to decline further during 2009. Recession, unemployment, and reduced mortgage availability will all combine to see continued difficulties in the housing market. Basically a lack of demand and an oversupply of property will create a buyers market, resulting in more downward pressure on prices.
For more housing market comment please visit our HMI blog.
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