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House prices dropped in December, the fifth fall in the last six months.
Rightmove is also confident that house prices will continue to fall during 2011, the extent to which hinges upon whether base rates rise and/or forced sale numbers increase substantially.
It believes that at best prices will be flat in 2011, but a drop by as much as 5% is predicted if sorely stretched lender forbearance buckles as prices fall and repossession numbers jump as a consequence.

The key elements of the Rightmove 2011 forecast are:

Properties coming to market falling to circa 1.2 million, down around 10% on 2010.
Transaction levels of around 600,000, continuing to run at circa 50% below historic norms for the second consecutive year.
National average asking prices are forecast to fall by up to 5% during 2011 if repossessions increase substantially. Should lender forbearance continue to limit repossessions then prices could end the year closer to the price standstill Rightmove has recorded in 2010 Miles Shipside, director of Rightmove commented: “In 2011 we will see larger falls in weaker markets due to over-supply and forced sales. Conversely, pockets of the country where demand remains credit crunch resistant and supply is traditionally low will see prices underpinned and somewhat immune from the falls in other areas.
“The fact that many would-be buyers do not have the ability to proceed, and some homeowners may find themselves in a position where they are forced to sell, drives prices down. These negative factors are likely to outweigh the positive price pressures of pent-up demand for housing and a price under-pinning shortage of quality homes in popular locations.
“This makes forecasting more of a lottery than usual, though the net result is likely to see average national asking prices fall slightly. At best they could be close to flat and at worst down by 5% if repossession numbers jump up from 1 in every 15 sales.”

The amount of mortgages approved hit its highest level for almost 6 months in November as it grew by 3.5% to 48,846 , latest information from e.surv shows.

The figure is the first month-on-month increase since April.
The average LTV rose by almost 1% to 57.7% in November, the first increase since June, and is well up on the 53.0% from November 2009. 

Homes up to £125,000 have an average LTV of 65.1%, while houses between £126,000 and £250,000 have an LTV of 57.9% while those between £251,000 and £375,000 at 54.4%.
But properties over £750,000 have an LTV of just over 40.1%.
Richard Sexton, business development director of e.surv, says: “November was a rare bright spot for the mortgage market.  There were some very attractive products available and that stimulated a lot of demand from borrowers, both to buy homes and to remortgage.�
“Lenders are still more comfortable focusing on wealthier borrowers and are prepared to expand loan-to-value ratios more for these groups than the average, but there was also an unusually large improvement in credit conditions for the lowest value borrowers too.
“Such a strong month will be hard to beat from here, but tales of the renewed demise of the market are hard to reconcile with this sort of strength.  The market usually goes very quiet in December of course, so the next big test for the market will be in the new year.  January is the month to watch.”