The latest RICS European Housing Review for this year shows that overall the housing market in Europe remained subdued throughout last year, and has price declines in the UK slowed with property prices falling by an average of 1.5%.
This was similar to several other European countries although France, Germany, Switzerland and Norway also saw house prices rise by at least 5%. Not surprisingly Spain and Ireland saw the worst house price declines of 10% and 17% respectively. However since mid-2007 house prices in the UK have fallen by nearly a third which is more significant than the price falls seen in Spain, Italy, Germany and France where prices have dropped by 27%, 14%, 11% and 8% respectively. When adjusted for inflation last year’s price fall becomes much worse with prices dropping by 5.7%.
Professor Michael Ball, author of the RICS research paper had this to say: "Real house prices in the UK have fallen by a third over the past four years, due to accommodation of a weak housing market in general price inflation. This has been one of the largest declines in Europe and will help to underpin housing market recovery once economic growth picks up again."
It's possible this recovery may happen sooner rather than later, as latest data from the Land Registry shows the average property price increased by 1.1% in January compared to December, while property in London increased by 2.5%. The only region to experience price falls was the North-West of England. Although prices in the North East dropped by 4.5% last year, it looks as if this area may already be making a comeback as prices increased by 2.2% last month. The property market as a whole is set to see a boost in activity up to March 24 when the deadline on the stamp duty exemption scheme for first-time buyers purchasing properties costing less than £250,000 is set to end, but it remains to be seen if this spring bounce will continue.