Britain house prices to drop in 2011, after average sale costs fell last year

By on Jan 12, 2011 in Europe, Lifestyle Comments

Britain house prices is set to drop in 2011, after the average sale costs fell last month, and could fall up to 10 percent this year and will be the lowest since 2004 if that happens, as revealed by British websites on Tuesday.

According to reports, the prices of houses in UK dropped by 1.3 percent in December 2010 compared to the previous month and may continue to drop this year, apparently much higher than the 0.4 percent which was expected by Halifax, a top British lending company.

House prices in Britain reportedly went down to 3.4 percent last year, with a daily reduction of £73 in December alone, as announced by Halifax, which means that the average house price dropped by £5,741 to £162,435 in 2010.

“Uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand.” Martin Ellis, Halifax housing economist was quoted as saying.

”Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers.” Mr. Ellis added.

British reports also said that house prices are now approximately 18 percent lower than their pre-crisis peak of £199,766 in the third quarter of 2007, which is according to Halifax data.

In the second quarter of 2009, house prices went down up to £157,767, but went up again to £168,032 in the first quarter of 2010.

Meanwhile, UK’s IHS Global Insight chief economist Howard Archer reported an expected of 7 percent house price decline this year, is year to £152,500, while Capital Economics property economist Paul Diggle predicted a 10 percent drop.

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