UK House Prices Uncertainty

The Telegraph had a story about homeowners dropping their prices. A figure of £5,000 off the average asking price was used.

Asking prices were dropped by an average of 2.2 per cent from July to August to £222,762 - the biggest slump this year - as sellers were forced to cut their prices amid the housing slump.

The monthly Rightmove house price report blamed lenders for boosting their profits by raising their mortgage rates but said the figures also showed the housing market was experiencing its traditional summer lull.

Another estate agent representative on the radio made the ever valid point that house prices are less effected by supply as by the availability of credit.

At the moment home sales are falling to people who have sold their own home themselves, those able to borrow from relatives and those with a £20,000- £50,000 deposit in the bank. These are finite buyers. UK savers do not have those kinds of reserves.

HIPS are contributing to the problem by taking the water testers out of the market. At £500 for a basic cost to see if your house isn’t worth what you thought it wasn’t, only the committed to sell will market their properties.

But there continues to be a shortage of properties for sale, with 82,700 homes put on the market during the month, 23 per cent fewer than in August last year when there was already a supply shortage.
It should be noted that the forecast is for 100,000 new build homes only for the whole year.

Just a few weeks ago there was talk of rises in 2009:

Homes ‘may rise in value in 2009′

The Telegraph at the time were much less trusting of the stats that led some people to predict house price rises by the end of this year:

UK house prices: has the great recovery started?

It does look like the further 10% fall this year and another 10% next year may be the correct forecast after all.

Bugger!

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