The consistent worry of economists analysing the UK property market for the last few months has been the continual falling of property values all across the United Kingdom. The prices in September, October and November were each down from the previous months and this made most economists predict further downswings in December as well as onwards into the year 2008.
However, the values for December according to figures presented by the Halifax Bank appear to show that property values actually rose by 1.3% in that month. While this certainly comes as a welcome surprise to most analysts, it does not change their broadcasts for what is likely to happen in the New Year.
A big part of that lack of change comes from the fact that while property values did indeed increase in December, over the last three months of the 2007 year they were down 0.8% from the preceding three months. That downturn represents the first in over 25 quarters and the largest since early 1995.
Data from the Council of Mortgage Lenders further accentuated the argument by showing that mortgages were at their lowest in seven months in November, with mortgage loan amounts being down 3.1% from the previous month and their overall value of GBP 12.2 billion being the lowest in more than a year.
Malcolm Barr, an economist at JPMorgan, said, "As much as this morning's Halifax data may moderate expectations of the magnitude of the decline…we continue to be surprised at the speed in which momentum in house price gains has faded."
According to Barr, creditors have already begun to tighten restrictions on the availability of credit in response to the expectation that property values will continue to fall.
Ed Stansfield, a property economist for Capital Economics, agreed, saying that "further house price falls are on their way."
