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House price decline 'makes moving from bottom of property ladder easier'

The difference in price between the average one-bedroom property and two-bedroom house is now some £31,000 - £10,500 less than it was a year ago and the lowest level for five years.

The figures also show it is relatively easier to trade up from a two-bedroom to a three-bedroom home, with the cost of making the move falling from £66,264 to £58,436, due to an average 11.9 per cent reduction in the value of three-bedroom homes.

However, it has become more expensive to move higher up the property ladder to a four-bedroom home because larger properties have held their value better, the figures show.The average cost of a four-bedroom home has dropped from £390,343 to £370,276 during the past year, but because the price of three-bedroom homes has fallen faster, the average cost of trading up increased from £141,733 in 2007 to £151,235 last year.

Nicholas Leeming, the director of propertyfinder.com, said: "The real catalyst for house price falls has been a lack of mortgage availability, particularly for less credit-worthy borrowers. "This means the bottom end of the market has been more impacted by the slow down and prices there have fallen more rapidly. "People higher up the ladder will naturally find it easier to gain access to finance in order to move, but because of this the price of four-bed properties has only fallen five per cent, compared to around 12 per cent for two- and three-beds, so the financial gap has actually widened."

Figures from Nationwide showed that the average house price fell by almost 16 per cent in 2008 to £153,048. Analysts have warned that prices will fall by up to another 15 per cent this year.

 


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