UK House Prices Collapse in July

The latest statement made by Rightmove on Sunday, July 18th, suggests that UK house prices declined this month, marking the first cut in property values this year.

In the first 2 weeks of July, house prices fell by 0.6% and reached £236,332. Rightmove experts expect them to decrease by another 7% in the second half of this month. Moreover, they forecast further price cuts in the coming months.

Rightmove links the fall in UK house prices to tighter mortgage rules and growing property supply. As such, the number of new houses, which appear on the market weekly, reaches 30,000, whereas the number of approved mortgages stays at a mere 10,000. Overall, the supply of new properties rose by 45% in July 2010.

The fall in house values in Great Britain was led by London and East Anglia, where prices dropped by 1.7% and 2.8% on average. The most significant decline was registered in Kingston and Chelsea, where house prices reached £1.82 million (-5.2%), being a major disappointment for investors.

According to the forecast of Capital Economics, the value of houses in the UK might depreciate through 2012.