Another house price tumble according to figures
July 16, 2008
According to recent reports November saw property prices fall by 1.1%, marking the third consecutive monthly drop. According to the Halifax this is the first time that this has happened since 1995, and the latest fall marks the largest drop in house prices since December 2006. Halifax officials state that the average property price has now fallen to £194,895, and this has taken the annual rate of growth from 8.9% in October to 6.3% for November.
One industry official commented in the Halifax figures, stating: “The third successive, and deeper, fall in the Halifax house price index in November raises concern that the housing market is headed for a sharp correction - particularly as it follows very weak Bank of England mortgage approvals data for October. The Halifax data provides significant late support to the case for the Bank of England to cut interest rates by 25 basis points to 5.5% on Thursday.”
A senior official from the Halifax said: “Higher mortgage repayments and falling real earnings have put pressure on households’ income, resulting in a slowdown in both house price growth and activity.” He did add, however, that the housing market was still solid, and said: “Strong market fundamentals, a structural housing supply shortage and pent-up demand from a large number of potential first-time buyers will support house prices, preventing a sustained and significant fall.”
The housing market is going through a slow period in all sectors, with consumer interest at low levels, mortgage approvals falling, and fewer properties going onto the market. Many homeowners are still struggling with mortgage repayments due to high interest rates despite the latest quarter point cut in the base rate.
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