House prices tumble to lowest level for 40 years

AFS Team·13 January 2012·3 min read
House prices tumble to lowest level for 40 years
House sales for 2011 are predicted to slump to the lowest level for 40-years - and could slip even further next year. The number of sales this year is expected to fall to around 50% of those at the housing market peak in 2007 at 840,000, according to housing market analysts Hometrack. Not only have the number of sales fallen, but prices are also down - 0.2% in November following a similar fall in October. Year-on-year prices dropped 2.3%, with a series of small falls each month since July 2010. London is the only region bucking the trend as prices have stood still for two months in a row. Hometrack cites reluctance to sell is stabilising prices as estate agents report a decline of 0.8% in homes coming to the market compared with the previous month. "2011 looks set to register the lowest level of housing turnover for 40 years – a trend that we expect to continue into 2012," said Richard Donnell, director or research at Hometrack. "An expected 840,000 sales in 2011 is almost 50% lower than in 2007 and equates to the average private sector home changing hands every 26 years. "This is creating a scarcity if housing and is acting as a support to pricing levels." Meanwhile, the Land Registry reports a 0.9% fall in home prices in England and Wales between September and October. The average price of a home was £159,999. Prices in London rose during the last 12 months by 0.3%, while the North East returned the greatest annual price drop - down 7.2%. The latest data for completed house sales, for August, showed a 1% increase to 62,010 from 61,469 in August 2010. The number of properties sold for more than £1 million dropped by 7% to 714 from 764 in August 2010.