Homeowners told not to panic

Posted: 30 Apr 2008 12:01:28 GMT

Recent negative house price figures should not lead to panic among homeowners.

Recent negative house price figures should not lead to panic among homeowners.

That is according to the National Association of Estate Agents (NAEA), which said that the small price drops seen in recent months must be looked at in context.

For example, the latest Nationwide House Price Index showed that prices fell by one per cent in the year to April 2008.

However, the NAEA pointed out that this follows a decade of huge price growth and the relatively small drop is understandable considering the problems caused by the global credit crunch.

"This needs to be put into context. We have been experiencing huge price leaps of double percentage points in the housing market in recent years so overall a one per cent drop is a tiny proportion of the rise and certainly not enough to throw many people into negative equity the way we saw it in the early '90s," commented NAEA chief executive Peter Bolton King.

"There is no denying that the credit crunch has affected confidence in the market but it is still important to remember that the underlying factors that support the property market remain: low unemployment, historically low interest rates and a pent-up demand for houses," he continued.

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