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UK house prices fall 8.7 pct in 2008 - Hometrack

Published 12/28/2008, 07:01 PM
Updated 12/28/2008, 07:05 PM

LONDON, Dec 29 (Reuters) - Housing prices in England and Wales fell 8.7 percent in 2008, bringing the average price of a house to 159,900 pounds ($235,800), property consultant Hometrack said in its monthly survey on Monday.

At 0.9 percent, the pace of monthly decline eased slightly from November's 1.1 percent drop, although prices have now fallen consistently over the last 15 months and 9.3 percent since the start of the credit crunch in August 2007.

British house prices tripled in the 10 years running up to their peak in the middle of last year, but have since fallen as much as 15 percent in other surveys as the global financial crisis has caused the supply of mortgages to dry up.

"Vendors started the year largely unaware that the turmoil in the U.S. financial markets would impact on the value of their home," said Richard Donnell, director of research at Hometrack.

"However, as the year progressed and the full impact of the financial and economic downturn started to become clearer, so house prices began to fall with the rate of price declines accelerating over the second half of the year."

Donnell said the expected turnover rate next year will equate to the average household moving once every 31 years, double the average of the last decade.

"The onset of recession and the prospect of rising unemployment over 2009 will continue to dampen confidence and in turn demand, which will inevitably lead to further house price falls over the next 12 months," he said.

Two other key indicators -- time taken to sell a property and proportion of the asking price achieved -- demonstrate the current weak housing market.

Hometrack found the average time to sell a property in December was 12 weeks, up from 8.3 weeks a year ago and a low of six weeks in April 2007.

The proportion of the asking price being achieved reached 88.6 percent, down from 93.5 percent a year ago, and well down on the high of 95.7 percent seen in April 2007. ($1=.6781 Pound) (Editing by Maureen Bavdek)

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