House Prices Continue to Fall
July 2, 2008
The last eight months have seen a continuation in the fall of house prices, with nearly a 1% drop in the last month alone. Compared to this time last year, the decrease has now reached 6.3%. Though this is a bitter pill to swallow for those already on the housing ladder, particularly those who have only recently dared to jump on, it does give some hope to those first time buyers that have slowly bided their time.
There is much speculation by experts and it has been said that we could experience another 20% fall before the next twelve months are out. Fionnuala Earley, the Nationwide’s chief economist has said
“The tightening of credit conditions, along with changing expectations of house price growth and a general weakening in consumer confidence in the economy have led to a severe slowing in housing market activity. With house purchase transactions so far below their long-term trend, it seems unlikely that there will be any rapid turnaround in housing market fortunes in the coming months. However, as prices continue to fall, affordability measures become more favourable for those in a well-financed position to be able to buy.”
So then, there is a sector of the population that will do well from the current credit crunch. But let’s face it, with the highest ever debt to credit ratio, the benefiting minority, really is an insignificant proportion of Britain. How the main bulk of Britons (including our very own government) are going to sort their financing issues is still unclear.
With hints that interest rates will increase, the future looks slightly bleak. Another figure to think about is that the number of repossessions increased by 17% in the first quarter of 2008. So basically, if you have a home you may lose it and if you don’t you are unlikely to anytime in the near future!
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