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UK house prices set to fall by 0.6%

House prices are set to fall across the UK this year according to a new report.

UK Housing Properties Investment

House prices are set to fall across the UK this year according to a new report.

Leading economic forecaster, the Centre for Economics and Business Research (CEBR) has predicted that Britain will experience a 0.6% fall in house prices, with London experiencing a larger dip of 3.3%. The report stated that the threat of higher interest rates, the uncertainty of May’s general election and increased supply with falling demand would all contribute to the small decrease in house prices.

The figures come after the UK saw increases of 8.8% nationally and a gain of 16.8% in the capital. The report cites fewer buyer inquiries and the growing length of time needed to sell a property as key indicators of the market slowing.

The Bank of England’s latest credit conditions survey corroborates the fall in demand, showing a large reduction in mortgage requests in the final quarter of 2014. The 59,029 requests made in November are down 0.8% on the previous month and a massive 22.9% on the 76,611 seen in January 2014 – the peak of a 74-month high.

However, the CEBR are one of few economists predicting a decrease in prices, with many others predicting continued growth. Both Halifax and the Royal Institution of Chartered Surveyors are forecasting a steady growth of 3%, with suggestions that this could rise to 5% over the course of the year once the election has been decided.

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