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UK house prices 'alarming'

Jaimie Kanwar

An industry analyst has warned that downward pressure on house prices is 'biting hard'...

Commenting on sliding house prices in the UK, Howard Archer, chief economist at Global Insight observed: "The latest data on the housing market is undeniably alarming. Clearly, the downward pressure on house prices coming from stretched buyer affordability and tight lending conditions is now biting hard”.

His comments came as Halifax revealed that house price dropped 2.4% in May – a 3.8% drop from a year earlier. According to Halifax's figures, the drop pushed the price of the average home down to £184,111.

Halifax Chief Economist Martin Ellis noted: “May's figures should be seen in the context of the rapid rises seen in recent years. The average UK house price rose by more than £88,000, or 79%, between August 2002 and August 2007.

“Falling prices, the reduced availability of mortgages and a squeeze on spending power are having a negative effect on the market”.