UK Landlord Forum / Life

The slump in Britain's house prices accelerated in May to the fastest level since the Nationwide began records 17 years ago.

The price of an average house fell 2.5 per cent in the month, making the seventh consecutive monthly fall in prices, the longest downward slope since the housing recession of 1992.

In the year, 4.4 per cent has been wiped off the value of homes, the biggest annual fall since December 1992 when the price fall reached 6.3 per cent.

The price of a typical house is now £173,583, £8,000 less than this time last year.

Fionnuala Earley, the Nationwide's chief economist said that it should be borne in mind that rising house prices up until last year means that even now prices are still 5 per cent higher than two years ago and 10 per cent higher than three years ago.

She added that she hoped the Bank of England would now resolve to cut rates: "Problems in credit markets have clearly been the trigger for changing fortunes in the housing market and while it is never wise to place too much weight on one data point, the apparent speed of the adjustment may lead the Bank of England's MPC to look more closely at the balance of risks to inflation in the medium term.

"Stronger than expected inflation appears to have shattered hopes of an early cut in the Bank Rate in June, but more downbeat economic and housing market data could lead more MPC members to join David Blanchflower in voting for pre-emptive cuts."

She said there was now mounting evidence of a downturn in the housing market. "The Bank of England reported an 11 per cent monthly drop in house purchase approvals in March to reach a seasonally adjusted 64,000 - the lowest since records began in 1993. RICS estate agents reported the most widespread regional falls in house prices in the history of their series.

House price expectations also fell into negative territory, as the Nationwide Consumer Confidence Index for April reported that consumers expect prices to fall by 1.7 per cent over the next six months.

Nationwide's figures deal a blow to tentative hopes of a recovery after the British Bankers' Association earlier this week reported a small rise in the number of loans for house purchases, to 38,704, in April, although this remains 39 per cent below a year earlier.

Meanwhile official inflation has hit 3 per cent after spiralling oil and food prices, and isexpected to soar further still later this year - reducing the chances of help through sustained interest rates cuts because the Bank of England has a 2 per cent inflation target.

Despite the steep falls in prices, Ms Earley said homeowners were unlikely to feel the pinch as badly as they did in the early 1990s when hundreds of thousands of householders who had bought at the peak of the boom in the late 1980s ended up in negative equity - their homes worth less than the amount they had borrowed.

She said fewer homeowners bought at the top of the market - which came in the second half of last year - and most have put down a larger deposit than their 1980s counterparts.

Many borrowers had also learnt from the experience of the early 90s by opting to repay capital on their loans rather than just interest. In 1988 85 per cent of loans were on an interest-only basis. In 2007-2007 only 30 per cent took out interest-only loans.

Nevertheless, Howard Archer of Global Insight described the 2.5 per cent May plunge in house prices as "a real shock ". He said it would fuel concern that we were now headed for a sharp correction in house prices.

"It now looks more likely than not that house prices will suffer double-digit falls both this year and in 2009," Mr Archer said.

"On top of this, unemployment is now starting to rise, which along with many homeowners having to re-mortgage at higher rates, is increasing the likelihood that a significant people will have to sell their house for 'distressed' reasons.

"Those people who took out 100 per cent or even 100 per cent plus mortgages within the last 18 months or so at the tail end of the housing market boom are particularly vulnerable."

He said people could not rely on the Bank of England cutting rates for help. "Even August may well prove too early for another interest rate cut to occur, as the Bank of England is unlikely to act until it has sustained, clear evidence that wage moderation is continuing and that reduced demand is undermining companies' pricing power," he said.

According to Nationwide house prices fell an average of £5000 last month.  Happy days.
We for get that in the good days some places where going up 600 pound a day.  So i assume if they are going to fall then the sums they fall are going to be high but relivant !.

Bad news for our Fiona!

Now give us some good news, Bob!

Quote from: propertyfag on May 29, 2008, 11:37:10 AM
Bad news for our Fiona!

Shh no its not.

I actually decided to look at what was sold or under offer in my area on Rightmove the other day and it doesnt seem to gloomy.
It seems that really cheap run down properties are selling and also really modern done up house for around about the 115k mark.

I do want £120,000 but it is alot better inside than any of the houses on the market atm in my area.

Sooo, I still am slightly worried still.... however I cant do much about it and atleast some things are in my favour.

Right?
Wrong ?
hmmm
Who knows.

It was sweet that i thought of you though, right?

To be honest i also thought of our very own Fee Fee but i just dont creep son thats all lol.

Fee fee i am sure you will be fine, i am also sure you have been on a learning curve eh !

In relation to if your right etc, your house will sell to someone who wants it wether its worth 120k now or 150k then.

120k, ummmm where is it 

Actually, Im glad you both thought of me and my small house  even if fag does creep a small bit.


haha I always say its been a learning curve ... but my boyfriend says its just what people say when its not working. 


Its in the PR7 area ... near Preston.
There are actually 2 properties further down om the same road that are on for 120k... by the same developers ( one has been on for a year now and the other about a month(stupid people) ) Ive been to see them both.... they kind of thought i was taking the piss the 2nd time I went to see house number 2 haha.
But I would of been worried otherwise because from the photos they both look nice houses... but having seen them both ... erh and them both being identically done up  I really didnt think the finish was there ... lovely properties size wise and some nice period features ... but just done so craply. It kind of felt you would be being fleeced if anyone bought it for anywhere near 120k.

Hmmm anyway Ive just realised im going off on one.
But my point was ... I actually dont know haha. Shame.

Im sure my house will be loved by one person (Me!) nah, hopefully someone with £120,000.

Oh, what the hell is all this creeping crap about? Urgh! You guys are meant to be my mates. What's going on here?

Your b/f is right now about the learning curve excuse!

How much did you buy your property for?

Well you see you cant really judge the final price by how much I got it for because it was such a dump when it was in the market .... it had damp everywhere .....the boiler was on its last legs etc. Well you have seen the photos... so you know it was pretty bad. But thats why I bought it.

It was on the market for I think £96,000 but I finally got it for £83,000 because I befriended the old woman So she didnt want to sell it too anyone else.

Oh as well mOO has dissapeared ! hasnt she.

Yeah, where the hell is that little hussy? And V!

This place is falling apart.
Fag i think you are sending them private messages and this is putting them offffff.* please send me one * lol.

Fee Fee as long as you make some cash babe, you will be fine.

Houe prices still 40% higher than they were 5 years ago (good return)
10% higher than two years ago

Its a long term game -once the muppets understand that then life will be fine. You havnt lost money unless your actually selling the property


Might take on job a spin doctor for Gordon Brown

Quote from: hopson on May 30, 2008, 02:24:11 PM
Houe prices still 40% higher than they were 5 years ago (good return)
10% higher than two years ago

Its a long term game -once the muppets understand that then life will be fine. You havnt lost money unless your actually selling the property


Might take on job a spin doctor for Gordon Brown

Exactamondo!