UK house prices dropped slightly during the month of September by a marginal 0.7%.  Compared with last year prices overall are down almost 1.5%, according to the latest figures from the Department of Communities and Local Government (DCLG).  The region with the biggest decline in prices over the last twelve months at more than 11.5% is Northern Ireland.  England experienced a slight decline of 1.1%.  This total was minimal compared with Wales and Scotland which saw prices drop by at least three times that much each. 

Howard Archer, UK economist at HIS Global Insight, remarked on the drop in prices across the UK.  He believes the DCLG figures are in line with the prediction of home prices softening through the coming months due to low confidence and a poor outlook moving forward.  Home prices across the UK are expected to fall another 5% by the middle of next year.

Archer commented on the home price issue, saying: “We suspect that squeezed purchasing power, a now markedly weakening labour market and major concerns over the economic outlook will limit potential buyers and weigh down on house prices.”

He added: “And there is significant concern that banks’ future ability to lend to home buyers could be hit by difficult wholesale funding requirements.”

Matt Hutchinson, director of house share website Spareroom.co.uk, commented on what buyers are currently facing, saying: “It is a frustrating time for many prospective buyers, because they are having the carrot of some very attractive mortgage rates dangled in front of them, but because they aren't able to afford the sizeable deposits still demanded by lenders; home ownership continues to remain just out of reach.”