PROPERTY prices in the United Kingdom are set to fall for the next five years as the market enters its biggest slump for at least half a century, according to UK economists.The gloomy outlook published last week by UKs National Institute of Economic and Social Research (NIESR), predicts that prices will fall 4.5per cent this year and 10.5per cent by the end of 2015, the longest period of decline since records began in the 1960s.The prospects for the housing market are very weak indeed over the next five years and that will weaken economic growth very significantly. It will be the longest period of falling house prices that we have seen, said NIESR economist Ray Barrell.The news comes as the latest figures show that prices are indeed falling. The Nationwide April index shows that price fell 0.2per cent last month and the price of a typical home is now 1.3per cent lower than one year ago at £165,609.However, Robert Gardner, Nationwides chief economist, said that the three month on three month measure of house prices, a better measure of the underlying trend, showed a modest rise of 0.6per cent.Since November 2010 house prices have increased in three months and fallen in three months. However, it is not unusual to see a pattern of modest monthly increases and decreases when the market is fairly static, as has been the case since last summer, he explained.He does not share the view of the NIESR. There is still little evidence to suggest that price declines will accelerate in the months ahead. While the UK economy only managed a modest bounce back at the start of the year, after the weather-induced contraction in late 2010, the economic recovery is expected to gather momentum, said Gardner.The latest figures from the flagship Land Registry House Price Index for England and Wales also shows prices falling. They were down 1.1per cent in March compared with February and it puts the average property price at £160,996.On an annual basis it says prices are down 2.3per cent. Only London has seen annual prices rise, up an average of 0.8per cent. And the only region which experienced a monthly rise was The North West with an increase of 0.7per cent.The North East experienced the greatest annual price fall with a decrease of 9.3per cent. Wales is the region with the most significant monthly price fall with a movement of 3.3per cent.The most up to date figures available show that during January 2011, the number of completed house sales in England and Wales rose by 2per cent to 36,425 from 35,809 in January 2010. The number of properties sold in England and Wales for over £1 million increased by 6per cent between January 2010 and January 2011, from 460 to 486.Meanwhile, last week forecast by analysts showed that European office property markets should see growth across all sectors but it will be unspectacular and modest, according to analysts.Economic growth in 2010 provided the necessary platform for a general improvement but overall, investors remain cautious with demand concentrated on prime buildings in core markets, the latest European Office Property Market report from King Sturge shows.
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