Toucan

The vast majority of potential homeowners in the UK property market expect prices to fall over the next twelve months.

With the correction in prices already in full swing – with Nationwide and Halifax reporting drops of 3.8 and 4.4 per cent year-on-year respectively – Brits see no end in sight.

Indeed, according to the Property Price Tracker from the BSA, some 74 per cent expect the correction to continue for at least the next 12-months.

The poll - which was carried out by YouGov – finds 25 per cent of Brits thought prices would fall by five to ten per cent, with the average forecast being a fall of 7.1 per cent.

HBOS published research last week suggesting the organisation – which owns the UK's largest mortgage lender Halifax – now expects house prices to fall by 9 per cent over the course of the next year.

Analysts Global Insight anticipates sharper falls, with prices now expected to fall 12 per cent in both 2008, and 2009.

"It is clear the positive outlook that has characterised the property market for the last few years is now a thing of the past, and people expect prices to fall over the next year," said Adrian Coles, director general of the BSA.

"However, this must be kept in perspective. Property price inflation has been so great over recent years that a 7.1 per cent fall in prices means that most people still have considerable equity in their property.

"Moreover, we must never forget that falling house prices mean that first-time buyers now have more purchasing power."

However, these expectations are not universal.

The BSA finds marked regional differences, with Welsh people the most pessimistic, expecting property prices across the UK to fall by 9.1 per cent over the year.

But a more positive outlook can be found in Yorkshire & Humberside, where people expect prices to fall by just 4.8 per cent.

"The survey also shows the great differences in anticipated price changes between people in different parts of the country, and shows a clear north/south divide," added Mr Coles.

"It emphasise the importance of buyers and sellers looking at their local market place before making decisions rather than concentrating on national headlines."

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