Savills Forecasts a 6.6% Fall in House Prices

According to experts at Savills, a British UK estate agency, house prices in the country might see another decline next year as a result of increased property supply and decreased demand from cash-rich buyers. Savills expects up to 6.6% fall in house prices to be registered by mid-summer 2010, with larger declines in the North than in the South that can easily be explained by already existing differences in London property and the Midlands property. As for more long-term perspectives, Savills property experts believe that house prices will stabilise and grow by 2011, with faster progress seen in the South rather than in the North. In the time period between 2012 and 2015 house prices are expected to skyrocket by as much as 27% as a consequence of continuous shortage of property supply. According to Savills estimates, an average UK house will be priced at £197,917 in 2015 – the figure is 7.5% higher than at the peak of house prices in 2007. High house prices will be one of the factors constraining the ability of the Brits to buy a house of their own. Other factors, according to Mr. Yolande Barnes, Savills’ head of residential research, high taxes, high rate of unemployment, and job cuts in the public sector cuts. These factors will not only affect homebuyers in the North, but also cash-rich buyers in London, who previously believed that their income bonuses would support the development of London and South East property markets. Currently, Savills has evidence that buying activity in London and in the South East is already slowing, despite the fact that the National Association of Estate Agents (NAEA) data shows there are 5 buyers for every marketed property. However, most of these cash-rich buyers, who have made inquiries, still have to turn into actual purchasers.