Continuous Slide in UK house Prices
The Nationwide price Index recorded its 15th Straight monthly Fall after prices slid 1.3 per cent in January, while the UK Land registry’s House Price index for December recorded a drop of 2.0 per cent.(data from the FT.com)
Last Thursday’s figures bring the year-on-year drop in the Nationwide Index to 16.6 per cent, against a decline of 15.9% in the year to December. As measured by the nationwide Index a series that has recorded monthly movements since 1991, more than four years price equity have been wiped out. House prices are 19.1 per cent down from their peak in October 2007.
Around 10 per cent of the UK mortgage holders owe banks more than the worth of their homes, and as the recession is getting worse with job losses and the banking system meltdown, those struggling to pay their mortgages will find themselves in real trouble to refinance their homes or pay their mortgages which will increase repossessions.
One traditional forerunner of house prices -that of buyer inquiries- appears to have lost its historical connection with house purchase activity. Although inquiries have been rising strongly for month the number of house purchased and the level at which they have been bought has not risen in line. Bargain hunters or first time buyers with a big deposit trying to acquire their dream hopes in this current environment are unlikely to show the same level of urgency as was the case one to two years ago.(Nationwide senior economist-Martin Gahbauer)
While the fall in house prices and the parallel reduction in interest rates have probably made many households curious about what is currently available in the market, many are likely to be hesitant to commit in a recessionary environment.
(Extracts from the FT)
