£5000 drop in house prices for March

According to a recent report there was a drop of £5000 on the average house price in the UK in March. Last month saw house prices take the biggest monthly fall since the housing market crash in the 1990s, with a fall of 2.5%.

In September of 1993 house prices fell by 3% in the space of one month, and according to Halifax figures this is the biggest tumble since that time.

Officials state that the average home in the UK is only worth just over 1% more than it was this time last year. Figures show that the average house price in February was £196,465 in February, but has now dropped to £191,556.

Many industry experts have predicted that house prices are set to plummet over the next couple of years, with some expecting them to tumble by up to 20% over this time period.

The Halifax has stated that at present house price inflation has hit its slowest pace in twelve years. One official from the bank said: ‘This fall is continuing the pattern whereby the market is readjusting. Sellers are having to adjust the price they ask for their properties.’

Halifax figures showed that there were regional variations in house price movement, and the West Midlands took one of the biggest hits, with a 5% drop, whereas the East Midlands actually saw a 2.2% rise.

One economist stated: ‘It is important not to put too much emphasis on one piece of data, and it should also be borne in mind that house prices were still only down 1% quarter-on-quarter in the first quarter of 2008, according to the Halifax. Nevertheless, the overall impression is that house prices were buckling markedly under the substantial pressure emanating from increased affordability constraints and markedly tighter lending conditions even before the latest escalation of the credit crunch.’