Categorized | International

Home Prices in the U.K. Drop for Second Straight Month

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The United Kingdom housing market experienced yet another setback in January, as reports indicate that the average home price declined for the second straight month. Housing prices fell two-tenths of a percentage point in January.

While two-tenths of a percentage point may not seem overly disconcerting, the drop put housing prices at their lowest level in a year. The housing market is suffering greatly from the weakening economic outlook and a rise in unemployment. With economic uncertainty rising daily, it is unlikely that the housing market will improve any time soon.

Although the outlook certainly is not positive, the residential real estate market in the United Kingdom may benefit, though, from the limited number of new supply hitting the market. As long as the supply of homes available for sale remains remotely low, analysts do not believe that the nation will experience a tremendous housing crash. Rather, prices will remain stagnant, or will face a very minimal drop.

The latest drop and the current state of the housing market are not at all surprising to analysts in Europe, There has been talks for months of a potential recession in the United Kingdom. Unemployment has risen substantially over the past year, and is now at the highest rate it has been in over fifteen years.

There is hope that the second half of 2012 will bring better results for the housing market, though there is no guarantee that any kind of improvement will be seen that soon. Banks in the United Kingdom are calling upon the government to act proactively to thwart off any further loss, but it has yet to be seen if the government will respond to those calls to action.

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About Nancy Raven

Nancy is the main writer for the International section of the website. Sometimes she also helps Drew out on the Finance/Mortgage section as well.

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