Prices fell by close to 16 percent last year

Recently released figures from a leading building society have indicated that last year saw house prices in the UK fall by 15.9 percent. Officials from the Nationwide Building Society stated that house prices fell by a further 2.5 percent in December, and this brought the annual house price fall to 15.9 percent. The average house price is said to have fallen now to £153,048, which is £29,000 lower than a year ago.

One economist from the building society said that last year had been a very turbulent one in terms of the mortgage and housing markets, and she stated: “The disruption in the financial markets worsened throughout 2008 and had larger implications for the real economy than we anticipated a year ago. We did not anticipate the speed of house price falls or the extent of the global and domestic economic slowdown.”

She went on to state: “Prices have further to fall before significant numbers of buyers will be willing to return to the market. Until the economy and the labour market stabilise, it is hard to imagine households becoming upbeat about the immediate future for house prices and this will hinder the pace of recovery.”

A number of industry officials have predicted that the situation in the housing and mortgage markets is set to get worse over the course of this year, with mortgage lending becoming more restricted, house prices continuing to fall, and the recession leading to job losses that could result in people being unable to keep on top of their mortgage repayments, which could increase the number of repossessions.