The average property in the UK has lost more than tenth of it value over the last year, according to the latest research from the Nationwide.
The latest house price index from the building society shows UK property prices fell 1.9 per cent during the course of August, taking annual falls to 10.5 per cent.
This is the first time falls have entered double digits since 1990 Nationwide confirmed. Furthermore, prices have now fallen for ten months in a row, to the lowest level recorded since early 1996.
As a result, the average property now costs £164,654 – well below of the £183,898 recorded a year ago.
“Recent activity levels in the housing market have been very subdued,” explained Nationwide’s chief economist, Fionnuala Earley.
“House builders in particular have been reporting significant reductions in site visits and reservations of new properties since this time last year, in spite of a big increase in the use of sales incentives.”
Earlier this week housebuilders Taylor Wimpey and Bovis reported sharp falls in profits and confirmed job losses made earlier in the year.
Yet, Nationwide suggests the data “is a little more optimistic and suggests that there may be some glimmers of interest returning to the market”. There has been an increase in viewings, for example, with buyers perhaps spurred by a fall in prices.
However, an oversupply of properties on the market is likely to dampen prices further in the short-term.
Behind the decline in property prices is a restriction in mortgage lending, explains Nationwide.
“There is clearly less mortgage borrowing taking place in the current market, but those borrowers choosing a new loan are tending to opt for fixed rate loans, even though they have been more expensive than trackers,” added Ms Earley.
Earlier this month, figures from the Council of Mortgage Lenders (CML) revealed the slump in mortgage lending continued in earnest during July.
Total lending stood at £24.8bn, 27 per cent lower than a year ago.
21 Comments
again this has not been helped by the clueless labour Government.
They issue a statement saying they are thinking of getting rid of stamp duty.
and then they leave it for 3 months leaving the housing market in limbo.
Who is going to buy a house at the moment knowing they are going to have pay stamp duty which they may not have to pay in 5 - 6 months time.
No one with a sane mind would buy a house at the moment
resulting in estate agents going under ie Barber.
all because of our dithering Government
I’m sure that Devon Salopian will see the green shoots of recovery…
1.9 percent is not enough. Keep coming down prices!
when the green shoots of recovery have grown sufficiently, peasebody, you are welcome to harvest the results and feed them to your horse!
and for once i agree with y mab government rumours on stamp duty have been most unhelpful.
however government plans to help those who are in danger of having their homes repossessed are at an advanced stage, watch this space
I might soon be able to afford a small house somewhere in this county!! Give it another 40% or so…
Keep the prices falling - the best solution to the affordable housing problem, without building a single new house. Of course the prices will spring back up again from 2010 or so, but for many buying at the bottom of the market will be a godsend for them, for their families, for their entire lives.
if labour did the good in the late 90’s early 00’s with the economy (and to be fair they did) then they must shoulder the blame now, they let the bubble go on too long, they should have acted to slow house price growth years ago but it was popular with the middle classes that house prices were going up so they allowed it to continue, now we need a market correction of about abnother 15% on prices so we can start buying houses again
why cannot our bank the northern rock come to the rescue of those in trouble with their mortgages. obviously any financial help has to be repaid. we have our own bank doing very littly apart from paying back billions to the treasury. it should be better used. the fall in house prices will cease soon, never been a better time to buy, so h st john peasebody time to upgrade from that horse drawn romany caravan of yours!!
thank goodness for low inflation, low interest rates and low unemployment. all these factors will help this government get us out of this temporary mess caused by external reasons and not our excellent government eh harold st john peasebody?
dont waste any more money on banks, just let the market correct itself, houses are STILL way over priced, so let them slump for a year or two then it will naturally pick back up again when they are affordable again
This government is free market laisez-fairre when it suits it but like a communist nationalising everything at other times, its pschysophrenic!! If it nationalised banks, why not energy, or why not windfall tax the energy companies?? They need to make up their mind on a clear agenda, and I think they should be laissez-faire and leave these banks and houses to go to the wall to teach them a lesson in prudent financial management
thank god thought at 35 i would never own a house
Reference his comments on “low” inflation, “low” unemployement and “low interest rates” I’d like to say the following to devon salopian:
Cuckoo! Cuckoo! Cuckoo! Cuckoo! Cuckoo! Cuckoo! Cuckoo! Cuckoo! Cuckoo! Cuckoo! Cuckoo! Cuckoo!
peasebody your cloud cuckoos remind of those dark old tory days of recession, 15% interest rates, 12% inflation and 4 million unemployed. sorry to be a cuckoo in your nest!! don’t let diddy david cameron and wee george osborne wreck it
GOOD! lower house prices are what the economy and the youth of today need
time for the tories to come to the rescue, with a radical right wing package of tax cuts please, bring back maggie, these socialists have ruined the economy
ah ha tory tax cuts, pleased to see thatcherism is alive and well just like the 3 musketeers one for each of them and sod the rest.
let us explore what tory tax cuts could mean.
1 closure of schools
2 closure of hospitals
3 closure of mental hospitals and the residents put out on the street, yes maggie did this in the 1980’s
4 a much poorer society except the top 20% of society. have we learned nothing from the tory tax cuts and other cuts that follow. get real.
5 record numbers living rough on the streets
don’t let those wreckers in again.
Devon - you really are a brainwashed Labour supporter! You probably don’t know, or pretend not to know/care (a typical Labour approach to, well, everything) that under NuLabor, since 1997, the divide between rich and poor in this country has massively widened.
The Tories are Tories. They don’t pretend to be anything else. You get what is on the tin. Etc. Labour is a pretend party pretending to govern this country. This Labour government has become a huge, expensive and dangerous joke.
Roll on the June 2010 election. Tory landslide here we come!
who cares dev
i have
1 private schools
2 Bupa insurance
3 i am not mad
4 bothered about the chavs
5 so what, let them eat cake
its time for us all to look after ourselves, not each other,
Another 10.5% down would do me fine!
What tax cuts would you propose Shelly that would bring in enough revenue?
A fairer tax system would be better. For instance, we could easily get £100 billion from those British companies which avoid UK tax by pretending to be located in tax havens.
This is what happens when you base your economy on the buying and selling of houses, the only reason the economy boomed was cheap money and rising house prices, whereby idiot owners thought low interest mortgages were the norm, they even borrowed on the rising equity never thinking they may have to pay it back. What total idiots.