House prices plunge but rises forecast

AVERAGE house prices in Swansea have fallen by around £10,000 in a year and some apartments have had around £50,000 wiped off their value, say estate agents.

The price crash mirrors the situation across the country where prices have fallen by 10.5 per cent, according to the latest survey by Nationwide.

Jonathan Reason, of Dawsons estate agents, said: "I don't think prices locally have fallen by as much as 10 per cent, maybe in the region of eight per cent between now and this time last year.

"So maybe if you take a house worth £160,000 this time last year, it may now be worth in the region of £150,000."

He said market conditions were "a lot different" to this time last year."

Mr Reason blamed the crisis in mortgage lending, precipitated by the Northern Rock saga with the credit crunch coming on top, for the problem.

Gloomy reports on the country's economic situation were also a factor, said Mr Reason.

"Negative press on the property market and in general has made people hold back," he said.

According to the Nationwide, house prices have fallen for 10 months in a row and are at their lowest level since early 2006.

And the forecast is that there is no pick up in prices on the horizon.

Mr Reason said: "For the time being and the rest of the year I can't see any dramatic change in the situation."

Trevor Carr, director of estate agents John Francis, said the fall in property prices was being exacerbated by the huge slump in prices of apartments.

"Locally, if you take apartments out of it, then it wouldn't be a 10 per cent fall," he said.

"Some of the apartments in the waterfront have gone down 20 per cent, well in excess of the fall in house prices.

"You might get a £300,000 apartment now worth less than £250,000, but houses?

"I don't think they have gone down as much as that."

Looking ahead to the rest of the year, Mr Carr said: "Possibly the rest of the year prices will continue to drop a bit but the bottom line is there is still an under supply of houses in this country.

"As soon as the banks sort themselves out with lending it will inevitably lead to prices going up again."

Nationwide's chief economist, Fionnuala Earley, said: "There is clearly less mortgage borrowing taking place in the current market, but those borrowers choosing a new loan are tending to opt for fixed rate loans, even though they have been more expensive than trackers."

Earlier this month, figures from the Council of Mortgage Lenders suggested that the slump in mortgage lending continued in July.