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News: Property Prices Stabilise But Rents Set To Plummet

Wed, 15 Jul 09

UK property prices are beginning to stabilise but rents are set to fall by up to 15% by the end of the year, according to latest research by financial experts Fitch Ratings.

Julian Crush, senior director in Fitch's Industrial group said: “Whilst UK property valuation decline is slowing and should stabilise this month, rents are generally predicted to fall by up to 15% in 2009.

“As a result, the UK rental market is becoming more difficult, with growing evidence of tenant defaults and rent arrears which could impact interest serviceability and hence (credit) ratings."

This stabilisation in property prices mirrors a spate of recent house price and asking price indices released by among others Home.co.uk and the Nationwide building society.

Across Europe Fitch anticipates that, from peak to trough, the fall in property prices will be in the region of 30%.

Falling rents coupled with a bleak credit outlook across Europe is set to continue to hurt the building sector, added Elisabetta Zorzi, another senior director in Fitch's Industrials group.

She said: “Fitch believes the deeper-than-anticipated global recession will translate into persistent challenging trading conditions in the building materials industry in mature markets whilst, simultaneously, the industry faces diminished prospects in emerging markets as economic growth also declines."

 

By Joe Lepper

 

See also: Asking Price Index, House Prices and Trends by Town and Postcode, Mortgages

 

 

 

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