The housing market will bottom out and house asking prices could start to rise again by the end of this year, according to research from Rightmove.co.uk, which represents 90 per cent of the UK's property market.
House asking prices fell 1.9 per cent in January, which amounts to a 7.3 per cent fall compared to this time last year, but is a smaller drop than the one seen in December, when UK property lost 2.3 per cent on average, and November when it fell 2.9 per cent.
Because the number of new sellers has halved as the level of new enquiries has doubled, Rightmove.co.uk
predicts that the UK property
market is now within eight per cent of the lowest it will go and will therefore soon bottom out, as supply and demand runs its course and pushes prices back up again by the time 2010 is rung in.
The average property asking price now stands at £213,570, down from £217,808 in December 2008, and considerably less than the £230,428 that it was in January 2008.
The property website predicts that 2009 will be the 'Year of the Property Deal' as house prices sink further, but competition could be fierce as enquiry levels rise and Brits rush to secure a bargain.
The rapidity with which prices have fallen, and the "chronic lack of new supply both in the resale and new homes markets" during the current property market crash sets it apart from the crash of the 1990s, Rightmove believes.
"The speed with which prices have declined has been worrying, but it does mean we are potentially reaching the bottom sooner." explains Miles Shipside, commercial director of Rightmove.
"One of the factors that will help to arrest price falls is a lack of property coming onto the market, resulting in lower inventory levels that align supply more closely with today’s restricted demand.
"The reticence of discretionary sellers to come to market and the relatively low number of forced sellers have seen new listing numbers plummet.
"The lack of new sellers means that over the next few months, we could actually see a rise in the average asking price of properties coming to the market.
"Add to this the collapse in the supply of new homes from developers and a massive shift of unsold stock to the lettings market, and the result is a dramatic reduction in the over-supply that has been present since early 2008."
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