DCLG: House prices fall 10.2% on year

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by Kay Murchie

Data from the Department for Communities and Local Government (DCLG) has revealed house prices fell by 2.3% during December, taking the annual fall to 10.2% during the 2008 year.

The double-digit drop is the first since the DCLG began collating the data back in 2003.

As with the Land Registry, the figures from the DCLG lag behind other house price indexes as they are based on completed transactions. It should also be noted that they are one month behind other indexes, reporting figures for December as opposed to January.

The DCLG said the fall in December was driven by a sharp decline in the average price of a detached home, which fell by 4.1%. Flats lost 2.4% in value, while bungalows fell 2.3% and semi-detached properties lost 2%. However, terraced houses only lost 0.8% in value.

On a regional basis, Scotland experienced the smallest price falls with the average cost of a home falling by 6% during 2008, while prices in the North East fell 8.9% over the year.

Northern Ireland noted the heaviest falls with homes losing 17.9% of their value over the same period. The East Midlands lost 11.5%, while prices in the South East prices fell 11.3%.

The DCLG puts the average property in the UK at £195,317, ranging from £136,057 in the North East to £304,421 in London.

In related news, the Royal Institution of Chartered Surveyors (Rics) today said lower house prices is leading to an influx of enquiries from potential buyers.

Rics said 71% of surveyors thought that falling prices were the main reason behind the renewed interest.