UK house prices have taken a negative hit following a decline in prices across the European market.
According to the latest European Housing Review by the Royal Institute of Chartered Surveyors (RICS) residential property in the United Kingdom fell by 1% over the course of 2011. This stagnation in the growth of the property sector has been mirrored by the wider EU market.
While some nations such as France, Switzerland and Norway reported price rises of 5% or more, others saw a significant drop. Ireland and Spain experienced falls of 17% and 10% respectively in 2011.
Professor Michael Ball of the University of Reading, author of the RICS research paper, said: "Real house prices in the UK have fallen by a third over the past four years, due to a combination of a weak housing market and general price inflation.”
“This has been one of the largest declines in Europe and will help to underpin housing market recovery once economic growth picks up again."
Since mid-2007 UK house prices have fallen by almost a third. This represents a bigger slump compared to countries such as Spain, which experienced a 27% drop in property values. Italian house prices also saw a sharp decline, falling by 14%. The picture was similarly bleak for Germany and France where prices dipped by 11% and 8% respectively for the same period.
Sweden and Switzerland were the two EU countries who managed to buck the downward trend. They have actually seen house prices increase over the last five years.
The RICS report shows that there has also been a ‘dramatic decline’ in homes being built and that overall the European housing market ‘remained subdued’.
Transferring money to the Eurozone
If you are looking to invest in the Eurozone, think carefully about how you will be transferring money to the area. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.
So if you are looking to send money overseas, be sure to compare the market before you buy your foreign currency.
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