Estate Agents Sussex

History of British Property Prices

British property prices were at an all time nominal high in the late 1980s due to the prosperous economy, the increasing quality of housing through an increase in newly-built housing stock and newly leased right-to-buy council housing.

Property prices fell by 30% in real terms (though nominal decreases were smaller) through the early nineties mainly due to higher interest rates. There was an increase in property repossessions by banks and building societies, and many people were left in negative equity for a number of years.

Prices started to recover in 1996, slowly at first and in some limited areas. By 2001 prices had in most places returned to their pre-collapse levels, and continued to rise, so much so that in 2004 many properties were "worth" double their market price only three years before. In many cases prices were increasing by 20% per year (1.5% per month).

Prices saw a cooling in 2005 that led some forecasters to predict a sharp correction in the market, that might have reduced house prices by as much as 40%. However, these fears proved unfounded, as a renewed strengthening in late 2005 continuing throughout 2006 and early 2007 has led most analysts to predict growth, albeit at a more modest pace, in the medium term.

however world markets especially in the American rental market has fallen which could lead to a reduction in property prices in the UK if the market continues to fall.

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