Property prices see £40k slump in four years

11/05/2011

House prices have fallen by around £40,000 the last four years, research has revealed.

At its peak in August 2007, the average value of a home in Britain was about £200,000.

But Halifax revealed this week that this figure has dropped to £160,000, a 20 per cent reduction, the Daily Mail reports.

Such a drop in prices has seen many homeowners drop into negative equity as the size of homeowners’ mortgages become higher than the value of their property.

A spokesman told the Daily Mail the underlying trend of property prices was ‘modest decline’ and blamed weak confidence among many workers following tax rises, high inflation, poor pay rises and public sector job insecurity.

A separate report, from the Royal Institution of Chartered Surveyors (RICS) has
Found property prices are falling across the country except in London, where they continue to rise.

Prices peaked in the north east, for example, at £130,000 in October 2007. The same house is currently worth about £101,000, a fall of 22 per cent.

In the same month, the average property in Kensington and Chelsea was worth about £835,000. It is now worth £876,550, a five per cent rise.

Property values in the UK are set to fall 4.5 per cent this year and 10.5 per cent by the end of 2015, according to the National Institute of Economic and Social Research.

The five-year slump in real terms – after inflation has been taken into account – is the longest period of decline since records began in the 1960s.

The group blamed the slide on weak consumer confidence in the face of economic uncertainty, which it said was constraining demand, putting downward pressure on prices.

Tags; Current UK Economy, Income Worries and Debt, Housing Debt and Bills, Retirement Money Problems,

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