James Mechan writes: The average UK house price fell by 1.5% in June – the largest decrease since August 2009. The average house is now valued at £165,738, as prices fell by 1% nationally. However, for the same period, prices in Greater London rose by 1%, giving an average house price of £401,841.

It has been suggested that the fall in house prices can be directly linked to the ending of a stamp duty concession for first-time buyers in March, where deals were pushed through right up until the deadline. These deals may have taken place later in the year, had it not been for this change, which created some volatility in the housing market: thus making it harder to examine the trends due to the unexpected level of activity.

However, despite the reintroduction of stamp duty on first-time buyers, many economy experts believe that prices will fall further throughout 2012: but the predicted changes range from -2% to -10%.

As house prices fall, it may discourage sellers from rejoining the property ladder as the risk of making a loss on a property – this will result in the economy slowing.

A good indicator of the health of the UK property market is usually the number of new build homes for sale: many regions report that this number fell during the first quarter of 2012, and the constrained number of new builds means that house prices and the market in general looks to remain stable across the rest of the year.

james.mechan@silverbean.co.uk
www.silverbean.co.uk

© 2012 Copyright James Mechan - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.