Govt figures show UK property prices falling in September but annual averages remain positive

 
The average price was £211,815 in September (not seasonally adjusted) with London having the highest average house price at £340,006 and the North East with the lowest average price at £138,851.
   
The figures also show that average UK house prices were 0.7% lower over the quarter to September 2010 compared to a quarterly increase of 1.6% in June. Wales saw the highest price increase at 8.8%, prices were up 6.5% in England and 1.4% in Scotland but fell by 7.6% in Northern Ireland.
 
Prices paid by first time buyers were 4.6% higher on average than a year earlier whilst prices paid by former owner occupiers increased by 6.7%. While prices paid for new properties were 5.6% higher on average than a year earlier whilst prices for pre-owned dwellings increased by 6.2%.
 
According to Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said it is significant that the quarter on quarter comparison figure is also still in positive territory although the momentum in the real estate market does appears to be waning with London and the South East predictably the most resilient parts of the country.
 
‘Although it is likely that prices will slip a little further in the near term, the more balanced picture between demand and supply coming through in recent RICS Housing Market Surveys suggests the downside will be quite limited,’ he explained.
 
‘The more pressing issue remains the relatively low level of transaction activity. This has more direct ramifications both for the health of the economy and the ability of those made unemployed to move to find work elsewhere in the country,’ he added.
 
Eric Stoclet, chief executive at Crown Mortgage Management believes that the sluggish housing market is set to continue. ‘The drop in prices is a symptom of lenders’ caution. That’s making it hard for those with limited deposits to get on the ladder,’ he said.
 
‘It should come as no surprise that the CLG shows that first time buyers have shown the least resilience over the year. So long as lending remains subdued, they will continue to suffer. It is highly unlikely, in view of the significant headwinds facing mortgage lending, that the market will pick up in the near future and as the government’s spending cuts bite in the New Year we can expect further falls in prices, with some of the northern regions faring much worse than others,’ he added.