Property: Fall of 3% means average house price has fallen to 2009 levels

12th August 2011

The Guardian reports that according to the LSL/Services Acadametrics index. the average price in England and Wales fell by just 0.1% in July, this means the average home is now worth £217,300, a level previously seen in December 2009.

"Gains seen in late 2010 and the early months of 2011 have been wiped out, though house prices are still significantly higher than the £200,234 average reached at the low point of the last recession in April 2009.

David Newnes, director of LSL Property Services, which owns estate agents Your Move and Reed Rains, said: "The fact that prices have only fallen by 0.1% means the steep declines between April and June have ceased. Transactions met their expected seasonal rise of 5% in July. This indicates that the market is not falling off a cliff in the short term, but that it remains weak in the longer term."

On his Telegraph blog personal finance editor Ian Cowie writes that mortgage borrowers should ignore the latest property stats because the only thing that matters is whether they can afford thier monthly repayments.

"It bears saying again that when it comes to financial forecasts there are only two types of expert; those who don't know and those who don't know they don't know.

"Here and now, homebuyers who can afford to pay more than the standard mortgage bills based on  today's historic low rates should seriously consider doing so. Overpaying the mortgage provides the best risk-free return available in terms of avoiding future interest costs and freeing up cash to spend on anything else. And the less debt you have when interest rates rise, the better. Those with most debt will be most exposed to the financial fallout if Mr Gardner's (financial adviser quoted in the blog) gloomy prognosis proves correct."



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