Categorized | International

Housing Prices in UK Drop Yet Again

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For the second straight month, residential real estate prices in the United Kingdom experienced a decline. The decrease in pricing is widely considered to be due to the expiration of the stamp duty holiday.

 

The stamp duty holiday was likely the reason that the housing market in the UK had a brief jump in pricing at the beginning of 2012. Many homebuyers rushed to make their purchase before the duty holiday expired.

 

Prices fell by two-hundredths of a percent month-over-moth, and are down nearly one percent on the year. While the decline in pricing has not been incredibly significant, it has had an impact on the market and consumer confidence. Economists do not believe that residential real estate market will see pricing growth at all for the rest of the year. In fact, prices are expected to drop roughly three percent.

 

Despite the anticipated decline in pricing, economists do believe that the overall economy will rebound before the year is over. Household spending should remain strong, and the labor market looks to perform at anticipated levels.

 

There were talks just prior to the expiration of the stamp holiday that suggested an extension of the duty holiday. However, those talks all but fell through, as the government did not see an extension being overly beneficial in the long term.

 

As the economy recovers over the next seven months, the residential real estate market will likely remain stagnant in pricing and sales. The government will be deciding in the coming days on the adjustment of interest rates, which may have an impact on the housing market.

 

 

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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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