House prices drop below £200k

Posted: 14 Jan 2009 11:41:10 GMT

The government has published figures this week showing that the average price of a property in the UK has now fallen to below £200,000, offering both good and bad news for homeowners hoping to sell their property.

The drop in price may lead to a greater number of potential buyers making an offer for a home, although the threat of negative equity will also mean homeowners will also have to act fast if they are hoping to sell up.

Explaining to the Independent that negative equity could be a real threat, Ed Stansfield, property economist at Capital Economics, said: "With the [predicted] recession now gathering momentum we would not be surprised to see buyer inquiries fall back in the months ahead, especially as lenders are continuing to tighten lending criteria and pass on only part of the cuts in official interest rates to new borrowers.

"In short, the house price correction has at least another year to run."

Most analysts have already claimed that house prices will fall a further ten to 15 per cent this year.

To sell a home faster, property owners could put their houses or flats online rather than use a traditional estate agent.


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