UK house prices to fall by 3% in 2012, says Hometrack
Tuesday, 27 December 2011 10:03
A sluggish property market in 2011 has led to further predictions that house prices will fall slightly in 2012.
A new report published by Hometrack shows that average prices dropped by 2.1 per cent over the course of this year, more than the 1.6 per cent witnessed in 2010.
However, this figure was prevented from declining any further by a robust performance by properties in London.
In the capital, it was found that the cost of a home was up by one per cent, although those in affluent postcodes were as much as five per cent more expensive than in 2010.
For the UK as a whole, 78 per cent of postcodes registered a decrease in house prices.
The growing economic uncertainty over the course of 2011 was blamed for this, with demand from new buyers falling by 11 per cent in the second six months of the year and those who already owned homes becoming more reluctant to sell.
After looking at the data, Hometrack said it expects house prices to fall by three per cent by December 2012 as unemployment continues to rise and household incomes are squeezed further.
Despite this, Hometrack's Richard Donnell said: "The housing market has proved resilient over 2011 despite a steadily deteriorating economic outlook."
The prediction is very similar to one made by the Rics Housing Market Forecast earlier in December. It also said house prices are likely to decrease by three per cent in 2012, although significant declines will be prevented by a low level of supply.
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