House prices fall 'fastest for 12 years' by Finance News Bulletin

Published: 30/11/07

House prices tumbled at the fastest speed for more than a decade in November, as confidence in the property marketplace disappearedBritish mortgage lenders want us to remove our novel house price crash calculator understand writing more

The Editor's BlogFigures from the latest Nationwide Building Society house cost index, released today, showed a 08% drop in house prices during the month – the biggest monthly drop since June 1995The drop of almost £1,500 took the price of an average home to £184,099 and reduced the annual rate of price rises to 6

9% from the 97% recorded in OctoberFears of a accommodation slump have been further fuelled by the Council of Mortgage Lenders warning that the present tight credit conditions for banks and building societies could lead to borrowers facing a much-reduced assortment of homeloansIn a speech to the City, Jackie Bennett, skull of rule at the CML, said: 'There is not enough retail financial support around about to fund mortgage markets if the capital markets do not open next day

'Bank of England statistics, meanwhile, showed a pointed drop in the number of mortgages granted last month and the Bank's governor, Mervun ruler added to the gloom by warning that the economic viewpoint was 'highly uncomfortable'In all 88,000 mortgages were granted last month, down from 102,000 in September and 128,000 a year ago It is the first time mortgage approvals have been below 100,000 since July 2005 The Land Registry revealed yesterday that property principles in London slipped 0

6% last monthMr King said the nervousness about the US economy was beginning to be felt in the UK property market He told MPs on the coffers select committee that receiving a mortgage could become more difficult: 'I'm certain lenders will feel more constrained in their ability to fund mortgage lending'His colleague lecturer David Blanchflower warned that Britain could 'catch a cold' from the US where he said there was now a 50-50 chance of a depression

'These are very hard times, it's very uncertain and populace don't be acquainted with what's coming,' he told MPs Brigid O'Leary, an economist at forecasters Capital Economics, said: 'nowadays's data from the Bank of England strengthen the overcast outlook for the housing market Added to the mix of evaporating buyer self-assurance, tighter credit circumstances and falling house price indices, these are increasingly convincing cipher that we are in the early stages of a housing marketplace correction'The gloomy figures will add pressure on the store to cut base rates from 5

75% before Christmas Spread gambling firm Cantor Index says chances of a December slash are 60-40 in favour of hold and most analysts still believe the first cut will be in February or March because of concerns that inflation is not yet under controlpossessions sceptics are predicting a serious downturn in the housing market, but will there be a crashThe fall in prices in Nationwide's index is in stark difference to October when it reported a 1

1% rise in prices while others, such as Halifax's report, had shown the standard cost of a house fallingThe building society bases its report on its mortgage information and said monthly movements can be volatile with November affected by robust information in October and the previous NovemberThe three-monthly inflation rate also showed the property market softening, lessening back to 15% form 1

8%Nationwide chief economist Fionuala Earley supposed higher borrowing costs and long-drawn-out affordability had led to the lack of confidence in the marketplace'November's data confirms that the housing marketplace is indeed cooling in line with the weakening in housing marketplace drivers,' she said 'Poor affordability, weaker house price enlargement expectations and the effect of earlier increases in interest tax have all affected demand in the market

'House purchase approvals - a good indicator of real market demand - have weakened from a peak of 128,000 a month in the final months of 2006 to 102,000 in September We expect this action to continue to fall back throughout the rest of this year, and into the next'Data free by property information group Hometrack, earlier this week, showed prices lessening by 02% in November

Meanwhile, the ground Registry reported the cost of a house rose by just 01% in October, with London seeing prices fall by 06%Howard Archer, leader economist at analysts Global Insight, supposed: 'While the 0

8% drop in home prices in November is eye-catching, it needs to be borne in mind that it followed an unexpected 11% point in home prices in October Taking October and November together, home prices only edged up which probably gives a truer reflection of the current state of the accommodation market'Come on everyone, let's be optimistic

The next possessions you buy is probably going to be much cheaper than it is nowadays, in fact you're saving cash every day just watching your next home fall in priceYesterday, a report by HSBC supposed home prices in Britain appeared to be overvalued by about 30 per cent So if the prices do fall by 30 per cent, just believe how much better off you'll beIf interest tax rise - those who are over-stretched and are at present struggling to keep their homes, will face a compulsory sale/reposession

If interest rates fall, the over-stretched will still need to keep their eye on the ball with the rising costs of living and family billsFTBs can't get on the ladder unless they have a loan of 6 x Salary, which no bank/BS should be silly enough to lend themThose relatively new to the BTL game who speculate about trade up yet more possessions if prices fall - tell me which bank/BS will be silly enough to lend you the moneySo whether tax rise or fall, or even grasp still - silly lending is now out of style, meaning that a sensible correction in the market MUST occur

Ideally, tax will hold and keep inflation controllable Many homeowners could stay put at the same time as prices correct, and as it's all family member, they won't lose outHouse prices should have come down at least five years ago I still feel I will be correct

The explosion of buy to let and the following disappointment and losses for the most recent entrants will further add pressure to the possessions bear market An overdue recession will further confirm the illusion we have been living in for the last several yearsI still fail to see how this quarrel of "demand outstripping supply" adds up -demand is irrelevant if the right of entry to finance is unavailable Prices are currently around 6 times standard income

If lenders go back to the more prudent 35 era lending, then surely that will dictate prices accordingly - correct me if I'm incorrectJoanna, London Thank you for writing with sense and clarity

(It's the simple fact, nobody catches a droping knife)We are still waiting for this 'predicted drop' and meanwhile house prices are still increasing and send-off us hopelessly outpricedThe problem is even if the BOE drop interest tax there's no assurance mortgage rates will drop Alliance & Leicester have said nowadays that will need to depend on customers' savings more now than they did before

Joe how are we leaving have 2-3 interest rate cuts Look at the rising inflation figures Not the CPI that the administration invented to ensure enlargement was only 2% Look at the price of milk bread lard etc, the record oil prices, the soon to rise electrical energy & gas prices

If interest rates are lowered at this occasion inflation will rocketThe bigger picture is that the house price bubble is worldwide Prices are already falling in the USA, Denmark, Ireland and Spain The UK is last to link but probably has furthest to fall as prices have risen more strongly here than elsewhere

put on't understand why people want home prices to rise so much Tait,London How are people going to pay for them when their wages are not going to increase by the same amount Looks similar to a 'touch' of greed to me there Some populace are making a fortune off the back of high house prices but for most of the population on this huge British Isles' it means meany cannot move up the steps and better themselves

A lot of very selfish people out there so sadThe interesting thing about Economics, is that there is no "right or wrong reply", merely opinion followed by hindsight I have to differ with Joanna(London), based on the fact that we are constantly being told we are not building anywhere near enough novel properties to meet demand Er-go insist exceeding supply - prices kept high

Unless of route we are being given incorrect information - surely notAs said many a time - possessions is only valued at the prices it is purchased/sold for fall and increases mean nothing as you do not have the cash until such transaction is complete Why waste occasion speculating - such reports cannot reflect the whole market/country - hence most of these articles can be seen unacceptable

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