UK house prices fall further

02/02/12

By Anna Dubuis

Prospective homebuyers may find the coming months offer a good time to purchase property, after reports of a 0.2 per cent dip in house prices in January.

The average property price in the UK is now £162,228, according to Nationwide's latest house price index, and buyers are also being offered some of the cheapest mortgage deals since 2003.

However, it is thought that due to a lack of new homes being built, prices in the future will only drop slightly.

Nationwide's chief economist, Robert Gardner, said: "With the flow of properties coming on to the market still more of a trickle than a flood, house prices are likely to continue to move sideways or only modestly lower in the months ahead."

Another hurdle being faced by buyers is the cost of a deposit.

High living costs and increased unemployment have stretched household budgets and borrowing is expected to become more difficult as lenders tighten their criteria.