As the Nationwide announces UK house prices are now 6.3 per cent lower than a year ago, many of us are wondering when the property turmoil will end. The overall picture is bleak, with Savills, the estate agent, predicting a drop of 10 per cent this year and a further 15 per cent drop next year. But this figure masks widespread regional variations, and it could be higher or lower depending on where you live.
Here are the experts' predictions on how much further prices will fall this year in each region of the UK.
London
There is a lot of stock on the market in London at the moment as buyers are being very cautious. James Hyman, of Cluttons, an estate agent in London, says: “I am seeing sellers reduce asking price by 10 per cent at the moment. I expect prices to ease another 15 per cent over the next year as buyers try to safeguard themselves from further falls in the market. If vendors are keen to sell, most will simply have to drop asking prices.”
South East
Although the south-east is generally more resilient to house price drops than say the North, it has still taken a hammering recently. Mr. Hyman says: “Where as parts of the north have seen falling prices for the last three years, this has only happened in the last 12 months in the south-east.
“Again, unless vendors are selling something very special or rare, they will need to reduce asking prices significantly to secure a buyer.”
Scotland
Scotland has been more resilient to price falls than the rest of the UK. Nonetheless Savills predicts that the turmoil in the property market means prices will fall by 5 per cent this year.
Faifal Choudhry, of Savills, says: “The expected fall is still significantly less than in other parts of the UK. Scotland has resisted a lot of the pressures of the UK’s housing crash, not just because of steady demand in cities like Edinburgh, Aberdeen and Glasgow, but because the average house prices have remained relatively low at around £150,000 – so borrowers are less stretched than in, say, London or the south-east.”
South-West
Estate agents in the South West are predicting a "flat" market for the rest of the year. Jonathan Haward, of The County Homesearch Company based in Cornwall, says: “Sellers will have to price properties very competitively to attract buyers. With the exception of a few period properties with coastal views, which are still selling quite well, prices will stagnate until confidence returns to the market.”
Northern Ireland
Northern Ireland continues to show by far the steepest correction in house prices across the UK with prices down 18 per cent over the last three months alone. Fionnuala Earley, chief economist at Nationwide, says: "The recent falls come on the back of unusually sharp increases in prices during 2006-7, when prices grew by 79 per cent. These increases were clearly not sustainable and leaves the market in Northern Ireland particularly vulnerable.”
Midlands
There are a very large number of houses unsold in Birmingham, Leicestershire and Lincolnshire. Nicholas Leeming, of Propertyfinder.com, says: “Vendors will have to continue reducing prices significantly to secure buyers this year.”
East Anglia
Andreas Bonney, regional director for Nolfolk, Suffolk and Essex at The County Homesearch Company, says: “It doesn’t surprise me that prices have already dropped 5 per cent in East Anglia. I would expect them to drop a further 5 per cent by the end of this year, with further small drops next year. I’m seeing buyers putting in offers of £250,000 on houses asking £325,000. It will be a long and slow recovery.”
North West
Gordon Roberts, who finds properties in Manchester, Merseyside and Cheshire at The County Homesearch Company, says: “The market is still moving downwards and we expect to see some further falls later this year. The properties worst affected are new build apartments in the centre of Manchester and Liverpool, where there is a massive over-supply. I’ve seen these apartments sell at auction for half of what they were bought for.
"Overall sellers of City Centre flats may have to take 30 or even 40 per cent less than their asking price by the end of the year. But I expect ordinary family homes to see a less dramatic drop in prices, probably at around 10 or 15 per cent this year.”
North East
The north east is already amongst the worst hit by the property downturn – and estate agents expect the market to continue to deteriorate throughout the year. Nicholas Leeming, of Propertyfinder.com, says: “Newcastle began to see house price falls even before Northern Rock. In places such as Durham, Northumberland and Leeds the market has effectively ground to a halt.”
Wales
Carol Peett at The County Homesearch Company says: “Whilst holiday homes or second houses in Pembrokeshire and Carmarthem are holding up well, the more run of the mill new-builds are falling by up to 10 per cent, and I expect to see this continue throughout the year. Properties in ex-mining communities are being badly hit, because there are simply too many houses.”
