House prices are dropping around £120 a day with experts warning that the year ahead looks bleak. Rightmove reported that prices have dropped by a total of nearly 5% since October, including a 0.8% decrease this month. Asking prices have fallen by up to 40% on some properties in recent months, according to website Property Snake, which gives details of asking prices which have been slashed. The price falls are hitting some parts of England more than others, with prices still rising in London and the North. The biggest loser is the East Midlands with prices dropping 6.1% in January alone. It is a cruel blow for anybody who recently stretched themselves to the limit to buy a home.
January 21, 2008
House prices dropping by £120 a day
January 16, 2008
Is falling house price such a big deal?
The one question which nobody seems to ask is – does it matter if house prices fall? If you don’t need to move home and can meet your mortgage repayment commitments, the value of your home, in the short term at least, is immaterial. Even if you have to move house, if the value of your own property has fallen by 10% then the likelihood is that the property you want to buy will have fallen by a similar proportion. For homeowners trading up, falling house prices are a positive advantage. Ultimately, lower house prices will make homes more affordable and bring larger numbers of first-time buyers into the market, many of whom have been priced out. It is also a time when experienced investors look to buy at the right price. When house prices go up, people have the confidence to spend (home improvements, furnishings etc), which keeps the economy going. Falling house prices however, make them much more reluctant to do this.
Rate of house price falls not seen since 1992
House prices are falling as quickly today as they did in the crash of the early nineties and only further cuts in interest rates will avoid a property meltdown, according to the Royal Institution of Chartered Surveyors (RICS). Its statistics show that nearly two-thirds of surveyors saw prices falling in December and virtually none say they are rising. The crunch has hit almost every part of England and Wales, while the West Midlands is suffering its fastest fall in history. However, the RICS says market conditions are better than before the 1990s crash. The coming months will be of great importance and many would-be-buyers (as well as homeowners on tracker rates) will be watching the Bank of England’s interest rate decisions while lenders remain reluctant to part with finance.
December 8, 2007
House prices to stagnate in 2008
Britain’s number one mortgage lender, the Halifax is predicting that the property market will stagnate in 2008 even if the Bank of England cuts the base rate to 5%. This is good news for home owners in comparison to other predictions of falls of 10 to 15 percent next year. But not so good for people still struggling to get on the property ladder. A report for the global finance monitor said that house prices in the UK have soared in relation to incomes and now stands at about 9x annual average earnings. Up from about 5x in 2001.
