This time the experts were right. At the beginning of 2011, experts such as The Royal Institution of Chartered Surveyors, HomeTrack and others predicted that prices would fall at least 2 % and then rise at the end of the year. A number of reasons were given for why this drop would happen and concerns were based on a few key points such as these:
• Job cuts in the public sector, reducing demand
• Problems with the Euro and the economy affecting UK banks
• Low level of people moving houses due to debt or low income
• Fears of a continued drop in property prices in coming years
• Home sellers accepting lower offers
Now as we near the end of the year, these predictions seem to be true. September seemed to promise a rise in prices, but it was short lived as it has been reported that there was a 36 percent fall in house prices during the month of October, down 25 percent more than in September. There did seem to be a rise in the months of March and April with demand from potential buyers improving, but problems with mortgage finance held people back. Problems may stem because mortgage lending to potential buyers is being affected by over-cautious lenders.
Does it seem as if prices will rise in these months? According to surveyors and experts, it's likely they will remain the same. Martin Ellis, economist at Halifax states that “Both prices and activity levels are expected to remain close to current levels over the coming few months.”
Simon Rubinsohn, leader at The Royal Institution of Chartered Surveyors says that their “headline forecast remains unchanged” and that in fact prices could be lower (2%) in the last part of 2011 than they were in 2010 (the same months).