Will house prices really fall further?

The question of house prices in the UK is one on the lips of many people amid concerns for the UK economy and the UK property sector in the short to medium term. There is no doubt that the latest surveys of the UK property sector seem to indicate trouble ahead but there is also no doubt that an increase in concern amongst UK consumers could effectively end up in a self fulfilling prophecy whereby the sector does suffer in the short to medium term.

The problem is that when the UK property sector was looking more buoyant there was interest in property in the UK and no talk of a downturn. As property prices moved higher and higher there was definite momentum growing until suddenly it appeared that the UK economy could potentially face a double dip recession. Suddenly, buyers disappeared and sellers reappeared tipping the balance of the UK property sector in favour of a downwards lurch. Over the past few weeks this downward lurch has gathered momentum and more and more buyers are sitting on the sidelines with sellers concerned about future prices and willing to take less than the "official asking price" to strike a deal.

The more downward momentum we see in the UK property market the more sellers are likely to come to the fore thereby softening prices again.