8:18 AM, 13th July 2011, About 10 years ago
House prices are stuck in a rut and are unlikely to recover to anywhere near pre-credit crunch prices any time soon – and perhaps not for a decade, according to new research.
Accountancy firm PricewaterhouseCoopers predicts prices will still languish 12% below the highs of 2007 in 2015 and reckons the chances of them rising above the previous peak in 2020 is just better than 50:50.
PwC chief economist John Hawksworth said: “Average UK house prices are expected to drift down further over the next year and then enjoy only a modest recovery over the next few years. This reflects the dampening impact of declining real income levels and continued tight credit conditions for first time buyers in particular.”
The Royal Institution of Chartered Surveyors (RICS) says the housing market is a ‘stalemate’ as demand from buyers failed to pick up in June, while sellers are seeking to rent rather than take a low offer.
RICS estate agents are tending to favour home hunters who have already sold their own property or first time buyers and movers who have a mortgage offer.
“The housing market was pretty flat during June. Buyer interest in purchasing property remains relatively low across much of the UK and the volume of new stock coming to the market has slackened. With continued uncertainty over the jobs market and the economy, this subdued picture is set to continue,” said RICS housing spokesman Alan Collett.
“London, however, remains a market apart with both sales and prices showing a greater degree of resilience.”
The fall in house prices is bottoming out although they are still dropping, the rate has slowed to almost a trickle.
latest figures from the Communities and Local Government Department show a drop in May of 1.6% over the year and 0.5% over the month.
The average price of a house in May was £203,528.
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