Some areas of the UK could see house prices fall by up to 10%, according to forecasts from financial information group Experian.
Some 25 postcodes, including parts of Hammersmith, Norwich and York, have been earmarked by Experian for a sudden fall in house prices. The reasoning behind the predictions is that all areas have experienced a 136%-251% increase in house prices since 1995 ‘ a rate that demand is failing to keep up with.
Bruno Rost, spokesperson for Experian, said: ‘Over the last year, the volume of sales has decreased markedly in these postcode districts. Although it appears prices have grown, it is from a much smaller base of traded properties. Only the more desirable properties are moving and not the market as a whole. For the whole market to re-gather momentum, some jump-start action will be needed in the shape of reductions in prices.’
But Martin Ritchley, chief executive of Coventry Building Society, did not agree with the predictions.
‘It is not a common view that prices will fall, a moderation in price increases may be a more accurate prediction. There is a shortage in the supply of housing, rates are low and seem likely to remain so, and affordability has never been better for the employed,’ he said.
Alex Bannister, group economist for Nationwide, said prices were unlikely to fall unless a local disaster was on the cards.
‘When you look at a very local level, odd trends can occur. But it would have to be because something bad happened to the local economy if prices did drop. For certain sectors of the market, like the top end of the London market, prices are a bit flat, but I do not see this as a widespread problem. As long as buyers do local research before buying they should be fine. At worst, we will not see such strong price growth in the future, but it does not mean prices will fall,’ he said.