Figures from the Land Registry have indicated that house prices have continued to fall in 2011, and other figures from the Nationwide suggest that the fall is ongoing.
The Land Registry have reported that 2011 saw an average 1.3% drop in house prices across England and Wales, with only London showing a rise in house prices.
The report was followed by information from the Nationwide Building Society that house prices fell a further 0.2% in January this year.
The only region in the UK which is bucking the trend in falling house prices is London. Prices in London have been rising for most of 2011 and are now at an average of nearly £350,000. This figure is 2.8% higher than the previous year over double average house price for the whole of England and Wales.
The Land Registry indicate that the average house price in England and Wales is now around £160,000. Their indication that prices fell by 1.3% in 2011 was matched by the Halifax.
Nationwide figures suggest that average prices did rise, but by only 1%.
The biggest falls in house prices was seen in the North East of England where prices fell by an average 7.1% across the region. Prices in Hartlepool recorded the biggest fall of 17.5% and Middlesbrough’s house prices fell by 10%. The average price of housing across the region was now down to £99,000. In Middlesbrough, the cheapest property that was sold in the whole country went for £16,000.
Other places which saw big house price falls included Oldham which saw an 11% drop in prices and Liverpool and Merthyr Tydfill where prices went down by 10%.
Most experts point to a combination of mortgage rationing and rising unemployment as the main reasons for the continuing depression of the housing market. Nationwide also suggested that house prices were unlikely to rise again in the coming months.
A spokesperson from Nationwide said: “Given the challenging conditions prevailing in late 2011, with the UK economy contracting in the final three months of the year, it is not surprising that house price growth softened at the start of 2012. The economy is not expected to gather much momentum until the second half of 2012 at the earliest, which suggests that labour market conditions and buyer sentiment may be slow to improve.”
Some areas of London continued to report big rises in their house prices. In Westminster, house prices went up by 9% and Chelsea and Kensington saw price rises of 7%.
Much of the housing demand in London is coming from people in the Eurozone who are looking to move their money out of countries such as Greece, Italy and Spain in an attempt to avoid the economic problems in these countries. Experts suggest this this demand is likely to continue to rise.
Nationwide also point out that although average had fallen and more people with an average incomes can now afford to buy a property, most lenders were still asking for a deposit of at least 20% before people qualify for a mortgage.