According to Nationwide the average property value in the UK has dropped by 12.4%. This means that on average a home in the UK now cost just £162,000; this figure was taken from Nationwide’s monthly house price index, which is based on its mortgage approvals over the period.

This current trough in the market is not likely to improve any time soon with many experts predicting further price falls to come. These further drops are not being helped by the continuing turmoil in the financial markets.

Although most of the UK is being affected by the property crisis there are still areas of London that are experiencing demand. Areas such as Knightsbridge and other places in South West London are being held up by lots of foreign investors wanting to snap up prime London real estate while the pound is weak.

However it does seem that the South of England is experiencing larger falls in house prices than the north, although this could be largely down to the properties being more expensive so proportionately speaking the falls would be larger in the South. First time buyers are being greatly affected when it comes to mortgages as they have to save larger deposits. This has a knock on effect on the rental market which has seen increased demand which means rent is going up making life more difficult for people saving for a property.

According to some estate agents they expect prices to fall by 25% over the next year with growth returning by 2011. This sounds like it is good news for anyone with a large enough deposit wishing to snap up a bargain, but means more nail biting for people who currently own a property and are losing value on their homes.

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