A U K Town Where House Prices Go Down

[Guest wrongmove]

A UK town where house prices go down

" Something strange is going on in the ancient Midlands market town of Melton Mowbray – house prices are falling.

Almost everywhere else in Britain, property prices are heading upwards and that's despite four interest rate rises over the last year, bulging household debts and record personal insolvencies.

In hotspots such as London and Northern Ireland, the cost of a home is rocketing. But there are signs that the market may be about to turn.

Famous for its pork pies and Stilton cheese, Melton stands out as a taste of what might happen across Britain's housing market.

"People can't afford mortgages, my mortgage is extortionate," said Diane McLeod, the 49-year-old manager of Melton's 14th century Anne of Cleves pub.

"People can't even afford to rent on wages like this – on stg5.50 an hour. And a lot of people have lost their jobs – I don't know how they are going to cope."

Interest rates hit a six-year high of 5.5 per cent last month and are expected to climb to 6 per cent by the end of year.

Melton teeters at one end of Britain's topsy-turvy housing market where soaring prices in some areas disguise far less spectacular house price gains, and even losses, elsewhere.

Foreign money and bumper City bonuses have supercharged price growth in London, but higher borrowing costs and heavy debts are taking their toll in other parts of the country where incomes tend to be lower.

Mortgage lender Halifax reported house prices in Melton fell two per cent on the year in the first three months of 2007, while prices in some London districts rose as much as a third.

Like many towns in England's long-suffering manufacturing and farming Midlands region, Melton has struggled to keep up with services-driven economic growth in larger cities.

While the young and educated leave in search of higher wages, many low earners have watched house prices surge well beyond their means as buy-to-let prospectors and city commuters swamp the market.

That's a bitter pill to swallow in a nation where two-thirds of people own their own homes.

"It's in the English nature that everyone wants their own home," said Christopher Watkin, branch manager of the Halifax estate agents in Melton.

"Ten years ago, if you worked in the local food factory you could buy yourself a terrace house on those joint wages. Those people in factories simply can't afford to buy a house. First time buyers are coming to the market later." "

[DrBob]

"House prices only go up", eh?

Sounds like someone's been telling porkie pies