Friday, March 27, 2009

At this rate the crash might only last another couple of years…

House price decline accelerates

House prices are falling even faster than before in England and Wales, according to the Land Registry. Prices dropped by another 2% in February, pushing the annual rate of decline from 15.1% to 16.5%. It means the average property is now worth £153,862, down by £30,361 in the past year, which is back to the level last seen in September 2004. Prices have now fallen for 18 months in a row, dragged down by the impact of the recession and the mortgage drought. Don't bother going to the story - this is all it says.

Posted by timmy t @ 11:47 AM (766 views)
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4 thoughts on “At this rate the crash might only last another couple of years…

  • dohousescrashinthewoods says:

    Didn’t Assetz say the decline was decelerating?

    There are lies, damned lies and then there’s Assetz.

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  • Hi I have asked this on the forum someplace as well, does anyone know what that Land Registry figure is for the 18 months? I think this is quite cleverly worded for people like me that miss the ANNUAL bit and presume that is TOTAL fall from peak. So what is the TOTAL figure does anyone know? Must be 23% is that correct? HBOS /Halifax put average house price in 2007 at £200000 is that correct?

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  • I guess that is 23% from peak. Of course in truth property prices have fallen 50% this just has not translated into selling prices as yet but very soon it will have to. The FSA sent a loud message to lenders 2 weeks ago when Lord Turner warned lenders that he would cap loan to income ratios at 3x’s income or lower to stop prices inflating if lenders started to lend irresponsibly again (ie over 4x’s loan to income / 100% mortgages etc). The Council of Mortgage lenders confirmed recently that the average mortgage for a FTB is now 3x’s loan to income. HBOS /Halifax figures confirm average loan to income ratio at peak was just under 6 x’s. Therefore in real term property prices for anyone that wants a mortgage is going to have to come down 50% as average lending levels have already done so.

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  • @dohousescrashinthewoods,

    Decelerating in my area rapidly. Fact, not opinion. Average price of a 3-bed semi in my large north Hants town dropped about 27k (to a still astronomical 227k, nine times UK average pay) between May and November 2008. Since November 2008 the average has gone down just 1k – which is statistically small enough to be considered meaningless. And local acquaintances who bought a 4-bed detached at 400k in mid-2007 (and recently decided to return to their native Canada after growing sick of this country) have just exchanged contracts for a very respectable 370k. That’s a piffling 7% fall from peak for a “prime” property. But daring to say that not every inch of the UK has had a drop of 30% since last Tuesday is near criminal in these parts, isn’t it.

    And yes, I’m a VI. I have a vested interest in a crash of at least 40% from peak so I can buy the house I’ve been saving for for eight years. But, unfortunately for me, not everywhere is Belfast, Thamesmead or Leeds city centre.

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