Monday, property consultant, Hometrack said house prices in the UK declined in 2008 and forecasts further decrease next year amid fears of a prolonged recession.
House prices on average slid 8.7% in 2008 and are expected to fall around 12% next year. In December alone, house prices slid 0.9%, slower than the 1.1% decrease seen in November. Average house prices now stand at around GBP 159,900.
Hometrack said sales volume decreased 45% this year and predicts a further fall in 2009.
Further, the property consultant said house prices in London showed the biggest drop of 10.1% this year. In North East, prices dropped 6.5%.
Hometrack's director of research, Richard Donnell said the onset of recession and the prospect of rising unemployment over 2009 will continue to dampen confidence and in turn the demand, which will inevitably lead to further house price falls in the next 12 months.
The property researcher noted that it took around 12 weeks on average to dispose property, double the time taken in April 2007. Hometrack surveyed more than 1,800 estate agents and surveyors across the UK.
Earlier, Hometrack had projected average house prices to fall 10% in 2009 and 3% in 2010. The forecast implied a peak to trough fall of 22%. Last week, the Royal Institution of Chartered Surveyors had predicted that house prices would decline further in 2009 on cautious mortgage lending. The RICS stated that house prices would fall 10% in 2009 amid the economic slowdown. The property website Rightmove had also predicted that average asking prices would bottom out by falling a further 10% by the end of 2009.
A report released by the British Bankers' Association on December 23 showed that the number of house purchases approved in the UK fell to 17,773 in November from 20,767 in the previous month. Approvals for re-mortgaging in November were almost half what they were in October and the previous six months.
Though mortgage approvals reached new lows and house prices continue to fall, people remained concerned about the influence of the weakening economy on their personal finances.
The Monetary Policy Committee of Bank of England had unanimously decided in December to reduce the bank rate by 100 basis points to 2% to rescue the British economy from falling into a deep and prolonged recession.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.