There was further disappointing news for the UK housing market this week after figures from the
Department for Communities and Local Government (DCLG) showed that the average price of a UK
home fell by 1.4 per cent in January. The average value of a home is now £208,552 with the annual
rate of house price inflation falling to just 0.5 per cent.
Disappointing property price figures
According to the DCLG house price index, January was the eighth consecutive month during which
the annual rate of house price inflation has fallen.
The figures come on the back of Financial Services Authority (FSA) data which showed that new
loans to borrowers were £37 billion in the fourth quarter of 2010 – a drop of 10 per cent on the
previous quarter and an 11 per cent fall compared to the final quarter of 2009.
However, whilst the figures were disappointing, house prices increased in five of the nine English
regions during the year to January 2011. The Guardian reports that ‘the largest increase was in the
east (4 per cent) and the smallest was in the south east (0.6 per cent). Yorkshire and the Humber
saw the largest annual fall of 4.6 per cent, while Scotland and the West Midlands both recorded a
3.2 per cent fall.’
Experts believe the UK housing market is still weakening
Property experts believe that the data from the DCLG confirms that the housing market in the UK
remains weak. Council of Mortgage Lenders (CML) figures recently showed a 29 per cent fall in
house sales between December 2010 and January 2011.
Howard Archer, chief UK and European economist at IHS Global Insight, said the figures reinforced
his view that house prices will continue to fall in 2011. “Specifically, we suspect that house prices
will fall by around 5 per cent in 2011 and end up losing around 10 per cent from the peak levels seen
in the first half of 2010,” he said.
