According to a recent report house prices in the UK are set to face the first annual fall since the middle of the 1990s, as experts continue to make predictions over forthcoming movement on house prices. Officials have said that house prices will fall in 2008 on an annual basis for the first time since the mid 90s. This comes as the result of a combination of the global credit crunch, fears of a recession, and even concerns over unemployment levels according to a recent report.

Industry analysts have said that there is a 78% chance that house prices will fall on an annual basis over the course of this year. Thirty analysts were interviewed as party of the survey. In a similar poll carried out in January the chances of an annual fall was at 65%, and in October of last year this was just 30%. The rise in the likelihood of an annual fall reflects how the credit crunch and other conditions have impacted upon the housing and financial sector.

One industry official stated: “Tightening credit conditions, weak purchasing power and a softening labour market will all prevent a resurgence in house price inflation.”

Officials have added that for the past few years house price inflation in the UK has been rocketing, but that the global credit crunch has had a severe impact, and along with other factors, has resulted in a marked slowdown in house price growth.

One economist also said: “The recent weakness in demand, evidenced by low levels of new buyer inquiries, will be exacerbated over coming months as the economy slows, unemployment begins to rise and job security is undermined.”

Recent additions:

• Bank of England cuts base rate
• Mortgage approval levels remain on a low
• Interest rate cut becomes more likely due to tighter lending conditions
• Huge drop in range of mortgage deals available
• Disaster could lie ahead for those on interest only mortgages

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