Mortgage News

"Modest" fall in house prices expected

27 June 2008

The Building Societies Association (BSA) has released research indicating a "modest" fall of 7.1 per cent in property prices.

The BSA`s Property Price Tracker survey found a quarter of respondents expected house prices to fall by five to ten per cent over the next 12 months, with an average prediction of just over seven per cent.

Regional variances appeared in the survey, carried out by YouGov. Those living in Wales were considered "pessimistic", expecting a 9.1 per cent fall. In Yorkshire and Humberside people were more "positive" with a forecast of 4.8 per cent.

However, price drops are considered good news for first-time buyers, said the BSA`s director general Adrian Coles. The forecast must also be compared with last year`s prices.

"This must be kept in perspective. Property price inflation has been so great over recent years that a 7.1% fall in prices means that most people still have considerable equity in their property," he said.

People in Scotland expected to see a drop of 5.7 per cent, according to
the research. This week it was reported by Lloyds TSB Scotland the Scottish economy was undergoing a slow growth with a net balance increase of 11 per cent.