House prices are expected to crash next year according to hosing experts as figures show that they have dropped for the third month in a row. The average house price fell about .6% in June down to £166,200 setting them at 17% below their August 2007 peak before the credit crisis started.
Last year prices rose temporarily due to a shortage of sale properties but the end of the Home Information Packs has led to many more houses entering the market dropping values substantially.
Halifax economist, Martin Ellis, stated that an increase in available properties on the market over the past few months has reduced the imbalance in the housing market losing the pressure on prices.
However, prices may be hit hard towards the close of 2010 and throughout 2011 as unemployment continues to increase and household budgets continue to get tighter.
Property economist Paul Diggle of Capital Economics stated that the figures from today show that house prices that accelerate usually mean that house price correction is in the near future. With most people about to see their income get squeezed tighter it is safe to assume that the house market will take a downward spiral.
Global Insight economist Howard Archer echoed these thoughts stating that right now it is tough to be optimistic about the housing outlook in 2011 in regards to prices due to the fact that the global fiscal squeeze is going to play a large role leading to job losses across the public sector.
A LSL Property Services house price index suggested that buyers on the other hand are taking advantage of the falling prices with property sales up by 20% in June.