House Prices Fall By Record Levels, But Stability On The Way
It is now common knowledge that since the beginning of the credit crunch, house prices in the UK have fallen steadily over the course of the last twelve months, leading to a lack of confidence and reluctance to buy in potential home owners, which has exacerbated the situation further.
Coupled with this is the fact that, due to the liquidity problems being faced by banks and building societies, it has become increasingly difficult to obtain finance through a mortgage or home loan. It is little wonder then that house prices have fallen as they have.
The latest figures from the Nationwide have revealed that UK house prices have fallen by an average of 12.4 per cent over the course of the last year, to the end of September this year, which is the highest level of reduction recorded since records began.
Previously, the biggest decrease in prices was recorded in the early nineties, when prices fell by 10.7 per cent. The average price of a house in the UK is now £161,797, although as usual, there are significant regional variations in these average price drops.
However, the Nationwide also said that it looks as though there are signs of some stability returning to the housing market, with the rate of price drops starting to slow down.
Fionnuala Earley from the Nationwide said “The less volatile three month on three month series has also barely changed for the last three months, after accelerating in the first half of the year. This may suggest the beginning of some stabilisation in the pace of house price falls.”
Although many people view the recent house price falls negatively, in the long term, this is what is needed to revitalise the housing and home loan markets. House prices have soared upwards over previous years, pricing many potential buyers out of the market. A reduction in house prices will help to make property more affordable, particularly for first time buyers and make financing the purchase easier through a mortgage or home loan.
