House prices to fall. Really, this time.

Experts have been predicting the downturn of the housing market for around 18 months now, since interest rates began to rise mid 2006. With house prices rising seemingly endlessly across the country all the while and sellers laughing all the way to the bank, this may seem another weary reiteration of the same old news in new shoes, but Nationwide have reported that house prices have actually shown evidence of this – finally – with a drop of 0.8 per cent last month. Even in London where would-be buyers have been mortgaging themselves to the hilt if not passing over the property section of the newspaper with barely a glance, prices are falling, and the annual rate of growth is reported to have dropped from 9.7 per cent to 6.9 per cent in the last three months.

If this trend continues into the new year proper, home owners may have to rethink their short term plans, particularly those who have been renovating with intent to sell; and first-time buyers looking to make long-term investment in property (ie, not to make a quick profit) may find themselves in a more favourable position. The losers in this are those who have entered the market during the boom and who will be approaching the end of their fixed-rate interest deals – many may find themselves in a less than desirable position.

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