House price falls slow in pace
December 26, 2008
Over the past year house prices have been falling month on month in the UK, with average house prices said to have fallen by close to 15% recently compared to the same period last year. However, although house prices are still falling, one major lender claims that the fall have started to slow in pace, with November having see a house price fall of just 0.4 percent, taking the annual rate of decline compared to the same time last year to around 13.9 percent.
Officials from Nationwide have pointed out, however, that whilst the slowdown in house price falls may seem encouraging for homeowners who have been in fear of plummeting values and negative equity, the property market is far from being out of the woods at present, with the ongoing economic crisis and the recession set to make this a very challenging time for the housing and mortgage sectors for the foreseeable future.
A senior economist from Nationwide said: “In spite of the moderation in house price falls recorded in November, with the economy in recession, conditions do not appear very favourable for a swift recovery in the housing market. With prices falling at their current rate, there is also less incentive for new borrowers to hurry into the market.”
The average house price has now fallen to around £158,442 according to the Nationwide Building Society.
Simon Rubinsohn of the Royal Institution of Chartered Surveyors said: “The government’s massive fiscal boost may prevent the downturn in economic activity being as severe as would otherwise be the case but it will not prevent a sharp jump in unemployment over the coming year. The real issue for the property market remains the collapse in transactions rather than the necessary adjustment in prices.”
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