House prices tumble at fastest pace since 1995
December 5, 2007 by admin
Filed under News, News-Mortgages
According to recent figures released by the Nationwide Building Society house prices across the UK took the biggest tumble since June 1995 in November.
The figures from the mortgage lender showed that house prices had fallen by 0.8%, which was the first fall since February last year and the biggest fall in twelve years. The annual rate of inflation on homes has also tumbled, falling from 9.7% in October to 6.9%.
The fall of 0.8% equates to an average £1500 drop in house prices, and this means that the average house price now stands at £184,099. However, this still means that the average house price is around £12000 more than just one year ago. In addition to the house price fall, the Bank of England has confirmed that mortgage approval levels have also slumped, with 88,000 new mortgage approvals in October, which was 12% lower than the previous month and 31% lower than October last year.
Nationwide officials confirmed that the housing market was facing a cooling off period, stating: “Poor affordability, weaker house price growth expectations and the effect of earlier increases in interest rates have all affected demand in the market.”
The Council of Mortgage Lenders added that the effects of the credit crunch and turmoil in the financial markets were affecting the housing market, and that the government needed to invest more money in the financial markets.
Michael Coogan from the Council of Mortgage Lenders stated: “We would like the government and the Bank of England to consider how best to unblock the funding log-jam that some UK lenders are experiencing, so that they can continue to fully meet consumer demand.”
Tom Smith
5th December 2007
