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Housing prices will continue to fall with gloomy economic forecast (2 August 2012)
Date: 02/08/2012
Already dropping price of housing are being said to be falling faster for three years with economists warning that the double dip recession would push them down even further.
The figures were published by the biggest building society Nationwide, showing the average value of a home having dropped by 2.6 per cent since July last year.
It is by far the biggest annual fall recorded since August 2009 and follows a drop in values every month since December, except for February. Last month the average property lost 0.7 per cent of its value.
The Nationwide’s figures also reveal the extraordinary slump in average prices since they peaked in October 2007. The same property which was at £186,044 has been valued at £164,389, a fall of £21,655 a difference which is almost the equivalent of what a typical British worker earns in a year.
Robert Gardner, chief economist at the Nationwide, the third biggest mortgage lender, said the drop was not surprising as the bigger scene at the economic front was disappointing.
Last month official figures showed Britain was in its deepest and longest downturn in history, and now there were concerns that the Olympics, instead of boosting the economy, was adding to its problems.
Peter Rollings, chief executive of the estate agency Marsh & Parsons, said national house prices were reflecting the plight of the economy. It was only a shortage of properties available that was preventing larger falls in many parts of the country.
Even the first time buyers were finding it tough to get into the property ladder as mortgage lending figures were still heading south, with the lenders showing conservative attitude.
A young person typically puts down a deposit for 20 per cent of the property’s value, compared to only 10 per cent before the recession.
Nationwide did not predict if house prices were continue to fall, but economists yesterday made their own bleak forecasts.
Matthew Pointon, of consultancy Capital Economics, said house prices are likely to ‘remain under pressure for the rest of the year’.