Modest property price falls expected

Three quarters of people expect property prices to fall over the next twelve months, according to the first quarterly Price Tracker survey by the Building Societies Association (BSA). And some 25% thought prices would decline by 5 to 10% - the average forecast being a fall of 7.1%.

The survey found marked regional differences. Welsh people are the most pessimistic, expecting property prices across the UK to fall by 9.1% over the year. But a more positive outlook can be found in Yorkshire and Humberside, where people expect prices to fall by just 4.8%.

Commenting on the figures, Adrian Coles, Director General of the BSA said: "It is clear that the positive outlook that has characterised the property market for the last few years is now a thing of the past, and people expect prices to fall over the next year."

Coles added however that this must be kept in perspective. Property price inflation has been so great over recent years that a 7.1% fall in prices means that most people still have considerable equity in their property. Moreover, it shouldn't be forgotten that falling house prices mean first time buyers will have more purchasing power.

"The survey also shows the great differences in anticipated price changes between people in different parts of the country, and shows a clear north / south divide. It emphasises the importance of buyers and sellers looking at their local market place before making decisions rather than concentrating on national headlines," Coles further notes.