According to Britain's largest building society, The Nationwide, UK property prices fell 2.5% last month. This is the biggest monthly fall since records began 17 years ago.
Whilst some analysts expressed surprise at the rate of the decline it is obvious that the decline should be short and sharp. Housing is a non-perishable product. If everyone from the Council of Mortgage Lenders to the Government is predicting a 10% decline over 12 months, why would any purchaser not hold out for a reduction against asking prices set in a more buoyant environment? In essence these forecasts, particularly those from more credible sources, tend to be reflexive. That is self-fulfilling prophecies. As sellers, buyers and lenders lower their price expectations.
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