According to new figures from the Halifax house prices fell by 3.6 per cent in September in comparison to August. Halifax say that this is the largest drop in house prices since 1983, but that it is far too early to begin predicting lengthy decline in house prices.
House prices are 2.6 per cent higher than a year ago, down from the rise of 4.6 per cent seen in August. The average price of a UK home now stands at £162,096.
These figures are close to the House Price Index report from the Nationwide Building Society of a 3.1 per cent annual change.
Housing economist at Halifax Martin Ellis said “Prospects for the housing market remain uncertain. Earnings growth is expected to be very modest over the next year, tax rises are on the way and more people are putting their homes on the market.”
“These will all be constraints on the market, dampening house prices. On the positive side, we expect interest rates to remain very low for some time, which will underpin the improved affordability position for homeowners.”
Industry experts say the headline percentage rate fall was not such a sure guide to market conditions.
Chief UK and European economist at IHS Global Insight, Howard Archer, said: “While the September house price drop highly likely overstates the weakness of the housing market, there seems little doubt that the housing market is now in reverse,” he said.
Mr Archer also said that he expected prices to fall gradually perhaps losing 10% of their value in 2011.
Craig Gedey, Marketing Manager at Debt Advisory Line said: “Potentially more bad news on the way for homeowners with the prediction of falling house prices in 2011.”
“Falling into a situation of negative equity may become a real worry to some homeowners over the course of the next 12 months.”
“Looking into a remortgage and repaying your unsecured debts as quickly as possible should help prevent major debt problems for homeowners over the next year.”
“Anyone who finds it difficult to repay unsecured debts along with the cost of living should get professional debt management advice as soon as they can.”
“At Debt Advisory Line we have helped thousands of people repay their debts. Visit www.debtadvisoryline.co.uk today or call us on 0800 157 7254.