UK Housing Market Facing Long Road Back

UK Housing Market Facing Long Road Back

The UK housing market faces a harsh reality. Home prices are at a lower level than they were a year ago. They have also been falling for five months straight. Many analysts agree, the ultimate fix is for first timers to rejoin the market.

Samantha Baden, property analyst with findaproperty .com commented on first timers and their ability to provide a boost to the housing market, saying: "First-time buyers are the essential building blocks of the housing market. Unless we have a steady supply of new first-time buyers coming into the housing market, there's a domino effect on every further link in the property chain. Liquidity dries up and the number of transactions slows down."

The fall in number of first-time buyers is jaw-dropping. Just 11 years ago there were half a million. The year 2010 saw only 200,000. A startling report recently released from HSBC, concluded house prices would need to fall more than 40% to restore the same price-to-earnings ratio as in the year 2000. The report also speaks unfavorably of government-sponsored home buying programs. Comments justified by the fact that 150,000 pound to 200,000 pound value home sales are off 45% from December of 2009, according to the Land Registry.