Property price tumbles cost homeowners £110 a week

Property price rises and falls added up to the average home losing £110 in value every week last year, according to mortgage lender the Halifax.

The average house price at the end of December was £162,435 – down £5,741 across the year and representing a drop of just 1.6% for the 12 months.

In contrast, the average home started the year worth £168,176 on a rising market house price market of 1.1% for 2009.

The figures are broadly in line with those produced by the Nationwide and both reflect a price fall of about 1% in the last quarter of 2010.

“Prices in the final three months of 2010 were 0.9% lower than in the previous quarter.  This rate of decline is significantly less than the quarterly falls of 5-6% during the second half of 2008.  House prices fell by 1.3% between November and December,” said The Halifax’s housing economist Martin Ellis.

Sellers have little confidence in property prices going up

“We expect limited movement in house prices during 2011 but with the risks on the downside. Interest rates are likely to remain low for some time.  This will continue to support a favourable affordability position for those entering the market and limit financial pressure on existing homeowners to sell.

“Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers.  Nonetheless, uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand.”

Meanwhile, online property portal Zoopla reports confidence in the housing market is at the lowest level for more than two years.

A survey of sellers revealed only 54% expect house prices to go up in the next six months – against 81% who thought property prices would rise in a survey a year ago. A third of homeowners believe prices will fall.

Nine out of 10 say the lack of mortgage availability is holding back the market and they do not expect any change in the near future.  If this is right demand is going to become pent up meaning that values are likely to rise quickly again when the mortgage markets recover.

If you’re not looking to sell and your property investments are producing strong cashflow you have little to worry about when it comes to pricing.  If you are in the fortunate position of being able to raise funds to buy the current state of the market could be percieved as a fantastic window of opportunity.

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