Average house price fell by £6000 in September

The average price for a property in the UK now stands at £162,092 which represents a £6,000 fall between August and September. There is now growing concern that the UK property market has peaked in the short-term and against a backdrop of difficult economic statistics there is very little chance of a short-term recovery. However, the consequences of a £6,000 drop in the value of property in the UK could be very far reaching.

The Council of Mortgage Lenders (CML) has confirmed that as house prices continue to fall in the UK more and more people will be dragged into negative equity which effectively means that their mortgage is larger than the value of their house. As a consequence, we will see the term "mortgage prisoners" bandied about in the weeks and months to come whereby more and more people will be unable to remortgage and therefore unable to move.

The situation in the UK housing market is becoming very worrying and unless we see more liquidity in the mortgage market, together with a slacking of ever tighter rules, there is no doubt that difficult times do lie ahead. Will the UK government be able to bully mortgage lenders into loosening their purse strings?