Figures released by property website Rightmove on Monday show that the average cost of properties in the UK fell by 3% during December. Asking prices have now dropped for 5 out of the last 6 months. The average cost of a UK house now stands at £222,410, a fall from the £229,379 that was recorded for November 2010. The company has said the drop follows the usual trend in house prices over the winter months. The drop still represents an overall increase of 0.4% over the past twelve months.
Rightmove forecasts that in 2011 sellers will continue to drop their asking prices and the national average may fall by up to 5%. Also as the market remains slow, many sellers will choose to put off selling their property for the foreseeable future. The pent up demand and fewer marketed properties will offset the downside risks of unemployment and increased forced sales.
The current tough mortgage policies also effect house prices. The report states that it has a negative impact and any growth that may occur will be undone by mortgage lending criteria.
Some agencies are forecasting prices to fall by around 10% next year and those home owners who are holding out for a higher price should be prepared to wait for years.