It is expected that over the next 5 years house prices across the UK will continue to fall. This will mark the longest period of recession in the housing market in 50 years.
The National Institute of Economic and Social Research have predicted that by 2015 house prices will be on average 10.5 lower than today’s prices.
Records only began in the 1960’s, but this is certainly the worse situation the housing market has been in since then.
For home owners wishing to move this could be a good time of course, as estate agent fees, solicitor charges and moving costs may all be reduced. But a sluggish housing market is a hard one to trade in. The other fear is increased repossessions as people who lose their jobs cannot afford to pay their mortgages and cannot sell to move in to more suitable housing.
Stagnation for last 6 Months
The housing market has been pretty stagnant for the last 6 months already. Prices have not moved, sales are low. This all has a knock on effect on the rest of the economy, and not just for estate agents and conveyancers.
When people purchase new homes they generally spend more in the retail sector. Many people also hire tradesmen to carry out alterations, improvements and repairs. The demand for this labour has fallen too.
Average UK House Price Fallen 2.3% to £160,996
Average house prices have fallen by 2.3% over the last year to £160,996. Nationwide Building Society announced that in April prices had fallen by an additional 0.2%, so if trends continue there could be another 2.4% drop over the next year.
Houses Are Longterm Steady Investment
Houses are still a long term investment opportunity though. Prices are steady and some analysts expect to see a rise in repossessions with some bargains coming on to the market over the next few years. For those with money in the bank that do not want to invest in the stock market, housing could be a good option.