House prices down on a year earlier after sharpest drop for 20 months

HOUSE prices have dropped at their sharpest rate since October 2009, the Land Registry announced yesterday. Compared to a year earlier, June’s prices were down 2.5 per cent, it said.

However, <a href="http://www.cityam.com/house-prices";>house prices</a> across England and Wales were flat month-on-month in June.

There is some disparity across the regions, the Land Registry said, with Wales experiencing a 2.8 per cent rise in prices on the month, while the north-east of England suffered a 2.1 per cent fall in the same period. The north-east had an even greater annual decline of 7.1 per cent, with regional house prices suffering drops seven of the last nine months.

London was the only region to record annual house price growth, but at a meagre 0.8 per cent.

House prices are expected to continue on the downward spiral, reflecting the troublesome economic climate and an environment that largely favours buyers, commented Howard Archer of IHS Global Insight.

House prices are expected to fall by around five per cent by mid-2012, Archer said, indicating that the average standardised price of a house, currently at £161,479, will fall further from its peak at £166,780 in August 2010.

The British Bankers’ Association this week reported that mortgage approvals were at an 11 month high, but were still only 55 per cent of the average monthly level seen since 1997.