The UK Housing Market Still On the Rocks
by Ritchie Mehta (23 November 2009)
The UK housing market has certainly seen better days. The last 18 months have taken a toll on house prices and the UK economy in general. However, with our European counterparts out of recession and demand in the housing market thought to be picking up, there was a glimmer of hope that we could see a recovery in the near future. But, if the latest survey by Bloomberg is anything to go by then we can think again.
According to research, that surveyed around 15 economists, nine felt that house prices could fall as we move into 2010. They predict a drop in the region of 1.6% on average however it can certainly vary from region to region. Perhaps, what is even more gloomy is the fact that they predict that house prices will not return to levels seen in 2007 until around 2014. If these estimates are to hold true, Britain is in for a long ride.
This survey correlates with the forecast that Nationwide has recently published which reveals a sharp fall in mortgage lending and subsequent profits for the institution in the first half of this year. The poor performance is partly due to the overall current economic situation in the UK, where unemployment has now reached 1.64 million individuals. The huge public deficit now standing at £11.4 billion will not do Britain any favours, especially with impending tax rises looking likely.
On a brighter note, one must stress that there are a number of institutions out there who are more bullish on house prices. For example, the Centre for Economics and Business Research suggests that there will be a 4% increase in house prices in the New Year.