The debate over house prices is one that has recently intensified in the UK as the Halifax report a massive 3.6% fall in prices in the month of September. This has brought with it speculation that house prices are headed in a downward spiral once again.
The monthly report, suggested that around £6k was wiped off the average home in one month taking the average house price to around £162k. The scale of this decrease is highly significant as it represents the greatest monthly decrease since the survey began in 1983.
According to the Halifax, two major factors were at the crux of this decrease. The first was an increase in the number of properties entering the marketplace. This in turn, in theory, would drive down prices as the balance gets tipped towards sellers. Secondly, people are still feeling a little anxious over the current and future state of the economy so much so that many are adopting a cautious out look when it comes to the real estate market.
Interestingly, the Nationwide House Price Index did not report the same levels of declines as indicated by the Halifax House Price Index. Rather they reported a monthly change of a mere 0.1%. They suggest the reason for the current state of the housing market can also be attributed to a third factor, the labour market. They report a mixed review on this front, citing the fact that the number of people in employment has reached a new recent high however many jobs were in fact part-time.
On balance, therefore many people are still sitting on the fence and adopting a wait and see attitude towards the real estate market.