Four quarters of house price falls, and its not over

There have now been four consecutive quarters of prices declines after reports that house prices fell fro the first quarter of 2011 and expert’s predictions are that more there is worse to come. Values had fallen off in the first three months over a year earlier by an average by 3% per the Halifax house price index. The average price now is at £162,912 and that included a 0.6% drop from the previous quarter.

Martin Ellis, Halifax’s housing economist says that the forecast is for a decline of 2% in 2011 for house prices in general. Individual financial circumstances and the overall economic outlook are causing constraints on the demand for housing resulting in a downward pressure on house prices.

HIS Global Insight economist Howard Archer was a bit more bearish saying he feels that prices will fall by more than 5% in 2011 and will amount to a total of 10% from the peak levels that existed in the being of 2010.

The average price per house fell by 3.3% from a year earlier. Prices in March 2010 peaked at £168,000 according to Halifax. The tighter fiscal policy and the rising interest rates will put more pressure on the prices in the housing market.

Because of the rise in unemployment and the fall in real income combined with the high levels of debt, mean there are many issues that take place in trying to get a mortgage and that is not good for house prices or sales.