Tuesday, June 24, 2008

“House prices have already started to fall at monthly rates not seen since the slump of the early 1990’s”

Mortgage approvals dive to record low in May

LONDON (Reuters) - Mortgage approvals fell at their sharpest annual pace in at least a decade to hit a record low in May, a survey showed on Tuesday, raising fears the housing market slowdown could turn into a crash. The British Bankers' Association said mortgage approvals for house purchase -- an indicator of house prices in the future -- fell to 27,968 last month from a downwardly revised 34,752 in April. That translated into a 56.1 percent drop on the same period a year ago -- the biggest such fall since the survey began in September 1997.

Posted by jack c @ 10:09 AM (1206 views)
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11 thoughts on ““House prices have already started to fall at monthly rates not seen since the slump of the early 1990’s”

  • ontheotherhand says:

    More strongly worded than the BBC version of the same story. At least someone got their pencil out and calculated that is a 56% drop in a year. I’m also please they mentioned last months figure is – ahem – downwardly revised.

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  • mark wadsworth says:

    “not seen since the slump of the early 1990’s”?

    Wot?

    Prices are falling about four or five times as fast as in 1990-95 slump.

    You’ll have to go a long way further back than the 1990s to find a crash on this scale!!

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  • holding out says:

    Dreadful grammer – I meant “has fallen ” of course

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  • The BBA’s data is a bit lightweight, and also incomplete. Wait for the BOE’s Lending to Individuals data at the end of the month.

    This does look pretty dramatic though – when the BOE reports, go into their interactive database and dig out the data series LPMVTUV, and output it as a graph – should be quite impressive!

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  • These figures are spectacular – you have to see the year-on-year fall in the context of the credit crunch not yet having bitten in June 07, but 20% down month on month is stunning.

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  • This is just the beginning, we are going to see the history books (and the rule books) rewritten before this is over.

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  • crash bandicoot says:

    pelethar, as you point out, Northern Rock were shovelling out money like there was no tomorrow in June ’07. Unfortunately there was no tomorrow for Northern Rock!

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  • Yes, yes. After many years of excess….I think reality is finally beginning to catch up with the UK housing market.

    The dream of getting loads of money for just adding nothing more than a cheap & nasty laminate floor and throwing magnolia paint on the walls is now well and truly over.

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  • @hpwatcher.. remarkable.. you described exactly what my last lodgings looked like…

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  • crash bandicoot, that’s brill !

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