Most Economists Expect UK Real Estate Prices To Fall In 2010

Fueled by massive government spending, lack of supply and the largest key rate cuts in the country's history, housing prices in the UK began to rise in 2009, after falling for two straight years. However, most economists believe that the rise in housing prices is a temporary condition, with prices likely to begin falling again. For more on this, see the following article from Global Property Guide .

House prices in the UK began recovering in early 2009, after two years’ pause.   By Q3 2009 the average price of UK houses was only 3% down from a year earlier (-4.4% in real terms), according to Nationwide, one of the UK’s biggest mortgage lenders.  Prices rose 3.95% (3.3% in real terms) to an average £160,159 (€177,172) during the previous quarter. British house prices rose more than 200% from 1996-2007.

UK property prices peaked in Q3 2007. Then interest rates were raised, and lending conditions tightened, and house price falls accelerated in H2-2008, due to the global financial meltdown and the economic recession. The collapse of Iceland’s banking system led to substantial losses for around 250,000 British depositors, and exacerbated the situation.

Other measures to help first-time house buyers and families have included:

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