House prices may take 12 years to recover as values fell by £1,000 in October
The average home has dipped by 0.7 per cent in value
A report has stated that house prices will not return to their pre-crisis peak until 2019. It predicts that prices will drop in every region next year, with Wales and Scotland among the worst hit.
The report, by the estate agency Knight Frank, says prices peaked at an average of £183,959 in 2007 but have fallen so dramatically that they will not return to this level until 2019 at the earliest. This 12-year recovery period is the longest since records began in the 1950s.
The report says the recovery is even further away if inflation is taken into account. If the increases in the cost of living are also considered, the date slips back to 2031. During the last housing market fall, prices peaked in 1989 at £62,782 and did not reach that level again until 1998.
In a report yesterday, Halifax, the country’s biggest mortgage lender, said prices have dropped for each of the last four months and were down 0.7 per cent last month. The average home now costs £158,426.
The Halifax update echoes a report by RightMove that claimed nearly a fifth of homeowners who bought their property in the last five years are now saddled with negative equity. It said that 17 per cent of people who purchased a home since 2007 have a mortgage balance bigger than the value of their home.
However, London prices, were up 5.5 per cent annually – more than twice as fast as the next highest rise of 2.3 per cent seen in the South East. Property prices rose in four of the regions surveyed and fell in the other six.
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