The rot in the housing market has already set in with annual falls in asking prices recorded across the UK, according to the latest Asking Price Index report from Home.co.uk.
The figures show that in six out of the ten regions in England and Wales, homeowners who think they made money on their property during 2007 are kidding themselves.
In Wales, East Midlands, the North and South West annual asking price growth from January 2007 to January 2008 was below the retail price index, representing a fall in value in real terms.
Meanwhile in the West Midlands and the North West asking prices have only just kept pace with inflation, indicating zero growth in real terms (RPI currently 4.0%).
Wales saw the biggest drop with zero growth in asking prices, equivalent to a 4% drop when inflation is taken into account.
Doug Shephard, from Home.co.uk, compared homeowners' attitude to house prices over 2007 to the five stages of grief: denial, anger, bargaining, depression and acceptance.
"Looking at the recent monthly fluctuations in market prices, it is evident that too many sellers are still in the denial stage. The unpalatable truth is that in the post-crunch credit environment properties simply aren't selling at 2006/7 prices.
"We are currently witnessing a meltdown in the UK housing market, which is in danger of becoming an unstoppable out of control juggernaut, likely to lead to devastation across the economy. It is high time that home sellers quickly move from denial to acceptance, lest they chase the market down."
Overall across England and Wales the rate of asking price growth over the last 12 months has now slowed to 5.2%, but this figure is skewed by large price rises during 2007 in the more volatile Greater London market and the Yorkshire and Humber area, of 9.6% and 7.3% respectively.
Other regions to see above inflation annual asking price rises were East Anglia (4.5%) and the South East (5.8%). Scotland, a very strong performer in recent years, is also experiencing reduced growth of 9.6% year-on-year.
But even these higher growth regions could start seeing 12 monthly falls in prices soon. Monthly falls for January were recorded in five out of ten regions in England and Wales, including Greater London, which fell by 1.2% in January, a month-on-month loss of over £4,200.
Sellers who need to sell soon are ill advised to 'hold and hope' as holding onto a depreciating asset is no fun. The sooner the market gets moving again the sooner it will recover.
Notes for EditorsOver the last 22 years, Home.co.uk has become established as a dynamic, innovative and ethical service. By providing the UK's most comprehensive Property Search and Estate Agents directory coupled with detailed House Price analysis, Home.co.uk delivers the real power of the Internet to inform and empower estate agents, homebuyers, renters, landlords and sellers in across the UK.
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