UK house prices fall sharply again

UK house prices have experienced the biggest fall on record this month as prices fell by £4,345 or 1.8 percent in July from June, which is the largest single fall on record, according to property website Rightmove.co.uk.

Rightmove said new sellers are having to cut prices in order to tempt buyers to ignore the risk of rising mortgage costs and tougher lending conditions, as well as the overriding threat of negative equity which hangs around most first-time buyers in the present climate.

This means that annual house prices are down by 2.0 percent, which is the lowest since 2002.

Most notably, there are fewer buyers on the market as the number of unsold properties has hit a new record level with an average of 77 homes per estate agency branch remaining in the shop window.

Estimates from the accountancy firm Ernst & Young forecast that house prices will fall about 10 percent this year and 6 percent in 2009. This is based on the fact that consumers have a record £1.4 trillion of debt and are currently struggling to afford homes in a period where it is substantially more difficult to get hold of credit.

According to the Royal Institution of Chartered Surveyors, property sales dropped to the lowest in at least 30 years.

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