UK Home Values Take a Tumble
If home prices in the UK haven’t dropped enough, Rightmove Plc is predicting 2011 will see a further reduction of 5%. Currently, prices sit at a level not equaled in more than a year. The average price of a house in England and Wales is 222,410 pounds. The price has dropped a total of 6.2% over the last 2 months, the largest back-to-back decrease since 2002.
The excessive price drop represents a weakness in the housing market at a time when it needs to show strength. The government will be enacting public spending cuts which could affect over 300,000 of the UK employed. The cuts are scheduled to begin during the 1st quarter of 2011. Miles Shipside, director of Rightmove, discussed how the market could see more success, saying: "Sellers are going to have to price more competitively in 2011." He added: "A continuing drift of a few percent similar to what we have seen in the latter part of 2010 is likely in 2011 until the economic recovery gathers real pace." While most areas North of England are seeing falling house values, the capital city is experiencing just the opposite. Rightmove believes the occupants will be asking for 3 to 5% more for their dwellings in 2011. The West Midlands saw the largest drop, as prices fell 5%. Even though London was most resilient to drops in prices, values there dropped almost 3%. All but two of the 32 districts have seen a decrease in prices.