UK house prices down 5.3%
Monday 1st September 2008, 12:00AM BST.
Property prices in the UK have fallen for the eleventh consecutive month, according to the latest house price index from Hometrack.
Annual falls now total some 5.3 per cent – the lowest level since the survey began in 2001.
Prices fell by 0.9 per cent in August alone, following falls of one per cent in June and 1.2 per cent in July, according to the housing intelligence organisation.
“When the market turns it can take as long as 24 to 36 months for prices to reach realistic levels and we are now well into this process,” explained Richard Donnell, Hometrack’s director of research.
“We may well start to see a moderation in the rate of monthly price falls, however, with ever growing uncertainty among households over the broader economic outlook the current re-pricing of housing still has some way to run.”
The average time a property remains on the market before being sold has also continued to increase. While it took around 10.3 weeks to secure the sale of a property in June, this increased to 11 weeks in July and 11 in August.
Properties are now only achieving 90.7 per cent of the asking price, finds Hometrack. The latest Rightmove house price survey also reveals these asking prices have declined 4.8 per cent over the last year.
Uniquely the Hometrack survey reveals prices fell in 58.1 of post code districts over the month.
“While demand remains weak with continued falls in new buyer registrations over August, a small but growing proportion of agents are reporting some improved signs of buyer interest on the back of lower prices and a modest reduction in the cost of mortgages,” added Mr Donnell.
“This trend could well become more evident over the autumn as we continue to move towards more realistic levels of pricing.”
The supply of property entering the market fell by 0.7 per cent over August, reflecting the expected slowdown in property transactions expected during the month.
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It’s worth reflecting on how people complain about rising food, fuel and other prices and yet (some at least) want house prices to rise. Perhaps we should try to feel happy for sellers (like supermarkets and oil companies) when their prices go up, just as we feel happy when the price of things we are selling(houses) goes up? Or perhaps we should be thankful we have a roof over our heads rather than lament making a few thousand less if we sold our home than we would have done last year. if you want to stay where you live, what does it matter if it’s worthless? How many other purchases to we expect to increase in value once bought? And if you argue that a house is also an investment, well, the value of these can go up or down, as we all know. And a sign that our whole system is quite mad is that when people wanted to borrow lots of money to buy a house, it wasn’t so difficult, but now house prices are lower (and presumably we need to borrow less money) it’s harder to get a mortgage. Straight-jacket, anyone?
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Keep ‘em coming down!
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And another thing! Has anyone noticed how, when there’s a flood, or bills go up, the TV refers to ‘homeowners’ being harmed, etc.? Do flood waters miraculously stop at the doors of those who rent their homes? Or do people who rent not pay bills. Come on UK, snap out of this obsession with owning. You can’t take it with you…
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surely a good thing, for our young people and our economy long term, thankfully the bubble is shrinking, less it burst
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For those of us owning houses, with no intention of moving in the foreseeable future, the price is largely irrelevant. If when I’m gone my children want to sell my house and buy houses of their own, they’ll be in a market that reflects its value both in terms of buying and selling – it’s all relative.
I think we will see a downturn for a couple of years, but demand for housing still outstrips supply, so in the longer-term (and mortgages are for the long-term), prices will go up.
I think we will see/are seeing an increasing shift to more rented property with the house purchasers being landlords rather than owner-occupiers. There is far more of a rented sector in mainland Europe, and they seem to manage.
As Stephen says – we’ve become obsessed with home ownership. Since the Thatcher days, when much of the affordable rented sector was removed by the sale of council houses, ordinary people have been much more exposed to the excesses and risks of market forces, and to some extent we’re still seeing the consequences now.
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