House prices down 15.9% in 2008

Tuesday, 06 January 2009 11:00

House prices fell by 15.9 per cent over 2008, according to figures from Nationwide.

A sharp fall in the value of homes in the UK in December of 2.5 per cent has pushed the average house price down to £153,048, a three-year low.

Many analysts have predicted further house price falls in 2009 and into 2010, with some forecasting a peak-to-trough decline of 30 per cent.

However, Fionnuala Earley, Nationwide's chief economist, warned of the dangers of making predictions in the current climate.

"Conditions remain highly volatile going into 2009, making it more difficult than usual to arrive at a specific forecast for house prices. In these unsettled times a forecast subject to frequent change could itself add to greater uncertainty," Ms Earley said.

Ms Earley did admit that 2009 would be a "bumpy year" for the UK economy.

Howard Archer, from Global Insight, said: "December's decline of 2.5 per cent confirmed that November's surprisingly small drop of 0.4 per cent was just a blip in the recent sharp drops in house prices, and was not the beginning of a moderating trend.

"We expect house prices are likely to fall by a further 15 per cent in 2009. This would take them down to £130,091 at the end of 2009 on the Nationwide measure."

Halifax, which conducts its own survey, said last week house prices fell 16.2 per cent over the year.

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