March 2008 saw the biggest drop in house prices for over a decade with the average home losing 2.5% of it’s value. Houses are still up 1.1% in value from the same time last year but are showing a 1% drop in the 1st quarter of 2008.
This drastic change is sure to be due to mortgage lenders pulling out of certain mortgages such as low or no deposits and mortgages for first time buyers. This mainly caused due to not being able to keep up with demand.
This may not be the end either. A lot of mortgage lenders have not yet filtered through these changing trends and are sure to follow suit in the coming weeks and months. This could cause what has been predicted as a “slump” in the UK property market.