With the US subprime crisis spreading to Europe, shockwaves in Northern Rock which would spread to other banks, UK economy growth not looking healthy, increasing trade deficits, sharply rising mortgage costs, falling corporate profits and job cuts especially in the City, and as market turmoils escalates, housing price which shows a first drop of 2.6% (from Rightmove last month), this are the signs of the beginning of a housing crash. PROPERTY SHARES ARE A SELL!

House prices fall at record rate

LONDON (Reuters) - British house prices fell at a record annual rate in July to their lowest level in two years, data from Britain's biggest mortgage lender HBOS showed on Thursday, as the outlook for the economy darkens.

Prices fell by 1.7 percent on the month, the sixth straight fall in a row, according to the lender's Halifax house price index. That took them nearly 10.9 percent lower on the year, a sharper decline than at any time in the last housing crash in the early 1990s.

"This continues the run of bad news on the housing market. Declines have been pretty unrelenting for the last six months," said Dominic White at ABN AMRO. "This could go on for the next year," he said.

More than 20,000 pounds has been wiped off the value of the average British home since the peak in prices in August last year and economists say prices could fall by another 10-15 percent as lenders have tightened up borrowing terms.

The grim news came as Bank of England policymakers were holding their monthly rate-setting meeting but no change is expected as inflation is nearly double the central bank's target.

Still, most analysts expect the BoE to cut rates at some point, even if not for a few months, as the housing market slide takes its toll on the wider economy.

Housebuilders have announced thousands of job cuts and furniture retailers have been hard hit as the number of property transactions has halved from a year ago.

Earlier this week a study by ratings agency S&P said house prices could fall by another 17 percent, which would increase the number of people in negative equity from 70,000 households to 1.7 million next year.

it aint british house prices falling.....its english house prices that r falling......and all regions are different as well too.......i wish media would stop making sweeping general comments.
even when house prices went up.....some areas only went up a few % but others went up 35% in a year

August 29, 2008

House prices fall 2% as UK gloom spreads


House prices in England and Wales have fallen 2 per cent over the past year after a further 0.6 per cent drop in July, according to Land Registry figures released today.

The average house price stood at 178,364 at the end of July, with London the only region across the country where property has risen in value over the past 12 months.

In the year to July, prices in the capital rose 1.7 per cent, contrasting with the East Midlands which experienced the largest decline in England and Wales, with values falling by 5.1 per cent.

The Land Registry's July data follows research released by Nationwide yesterday showing prices fell by more than 10 per cent since last August - the fastest rate in 18 years.

Land Registry figures are based on the value of homes in completed sales logged with the agency, while the rival surveys gauge prices based on a range of alternative measures, such as mortgage offers, that reflect earlier stages in the home-buying process.

Despite recording price rises for the year, transactions fell in London, mirroring the decline around the rest of the country.

East Midlands have been hardest hit followed by Wales where prices dropped 4.4 per cent. In the West Midlands prices fell 3.8 per cent and the South West recorded declines of 3.4 per cent.

At 0.1 per cent down the North East held up the best after London while the South East dropped 1.3 per cent over the year.

Broken down into house types, the greatest price falls in July were for detached houses, which dipped 2.3 per cent for the year. Semi-detached, terraces and flats have all fallen 2.0 per cent.

August 29, 2008

House prices fall 2% as UK gloom spreads


House prices in England and Wales have fallen 2 per cent over the past year after a further 0.6 per cent drop in July, according to Land Registry figures released today.

The average house price stood at 178,364 at the end of July, with London the only region across the country where property has risen in value over the past 12 months.

In the year to July, prices in the capital rose 1.7 per cent, contrasting with the East Midlands which experienced the largest decline in England and Wales, with values falling by 5.1 per cent.

The Land Registry's July data follows research released by Nationwide yesterday showing prices fell by more than 10 per cent since last August - the fastest rate in 18 years.

Land Registry figures are based on the value of homes in completed sales logged with the agency, while the rival surveys gauge prices based on a range of alternative measures, such as mortgage offers, that reflect earlier stages in the home-buying process.

Despite recording price rises for the year, transactions fell in London, mirroring the decline around the rest of the country.

East Midlands have been hardest hit followed by Wales where prices dropped 4.4 per cent. In the West Midlands prices fell 3.8 per cent and the South West recorded declines of 3.4 per cent.

At 0.1 per cent down the North East held up the best after London while the South East dropped 1.3 per cent over the year.

Broken down into house types, the greatest price falls in July were for detached houses, which dipped 2.3 per cent for the year. Semi-detached, terraces and flats have all fallen 2.0 per cent.

makes me laugh to read 2% this and 1.6% that etc, prices are down 30% already if your serious about selling, values have gone to the opposite ends - instead of being overvalued, now they have to be seen as undervalued to achieve a sale...

Just got sale agreed on a place i put on market on Monday... its all down to price at the end of the day, buyers are still out there

prices aint going down in scotland.....so i wish media and thus most people would stop referring to all this doom and gloom......its just certain areas in uk that r falling.

Government package designed to support housing out today apparently...

Isn't the issue that it was the "cheap money" that created the high house-prices . . . . they never were worth ten times the average salary, hence the need to manipulate the earnings and with that the risks of reposession.

All the while the Government did nothinig the cheap money flowed and more (young) folk got into deals that were not sustainable. We should look back at houseprices and be grateful prices are being corrected. Sure, that's no comfort for buyers in the last 5 years (particularly), but that is the sad fact as I see it.
When prices are "silly" you should rent . . . . . for it would not endure . . . . . then when things get "better" - that's the time to buy....maybe in another year....(Late 09)
Any other views here?

Scotinvestor - do you not think there is a storm gathering with RBS - won't this be devastating for property?

Broadly true, hangon, but very simplistic.
All of us on here should know that timing the exact top and bottom is almost impossible.
If one bought at the bottom and sold at the top, to then buy in again at the bottom, then theoretically it works. The truth is that if the timing is less than exact then stamp duty, agents fees, valuation & application fees, legal fees, moving fees etc. would mean that you lost out.
The truth is more prosaic. Houses are not investments and the quicker we learn that, then the better we will all be for a sustainable market.
Sure, people have made money in property, but due to its illiquid nature and vulnerability to swings, it is an asset class that should only be utilised by the more wealthy. The problem is that every cabbie in yorkshire owns several houses as he sees it as a way to a quick buck.

Looks like new buyers will be able to get a 30% interest free loan to buy a property - knowing full well that if they fail to make the repayments on the mortgage the local council will pick up the payments...crazy!!

Sounds like council tax might be getting a whole lot more expensive, probably end up more than the mortgage!

that will be to pay for the gold-plated council workers pensions

UK house prices recorded an annual fall of 10.9% in August - the first double digit drop since 1983 says the Halifax.

The lender said that property prices dropped 1.8% in August compared with July, leaving the cost of an average home in the UK at 174,178.

It said market conditions would remain "challenging" in the months ahead, despite government help for buyers

News that house prices are still falling close to 2% month-on-month and the expectation of further declines is likely to be an important factor limiting the scope for a quick recovery.

The benefits of the stamp duty saving would be wiped out in less than a month

Over the past six months, house prices on the Halifax index have fallen by an average 2,900 a month, greater than the maximum potential saving of 1,750 to a buyer from the recently introduced stamp duty holiday.

A slowdown in transactions suggests many buyers are delaying as prices continue to fall.

2009 SPRING IT A MUST I HOPE.

england prices r down more like!!

prices will keep going down till 2010 at least......prices wont increase a lot till 2015 according to top housing advisor to pm

I don't think so!

Prices may fall more but everybody is waiting to dive in when the market bottoms because they will feel they are getting a bargain and won't want to be beaten to the property by anybody else. Greed will get the better of people. The recovery may initially be slow but bricks and mortar have always been a good investment.

If I was given 1 every time an analyst came out with crap, I'd be a millionaire!

There may be people waiting to dive in but, the number that will be able to dive in will be affected by affordability. This whole episode is going to educate people the hard way including the banks and, mortgages will get harder to get even if prices fall by another 25% or so. I live in Kent and I do not think the penny has totally dropped yet with people. As for Gordon's help with stamp duty etc. imho if possible, I would advise people to stear clear of buying a house for the time being and live with Mum and Dad for a year or so and see if there is a new dawn then. Its all the fault of unreasonable cheep lending, greed, awful tv property programs stirring up encouragement, and a generation of too many people with the lack of respect for monetary value for one reason of another. Last but certainly not least its the fault of scotinvestor's mate Gordon with his high taxation and wasteful ways.

Sentiment is the key word, at some point lenders have to become more competitive to gain business, they cant just keep writing off millions and refuse to lend, lending is where they make money. I believe it is already happening, with interbank rates becoming slightly more competitive. The point is, if investors started reading headlines like the worst is over, there would be a bigger panic to purchase property in fear that prices are already as low as they are likely to go... this may not be as far away as some people think. imo. We are still an overpopulated island, and everyone wants to own their own home. When sentiment does change, i believe prices are capable of rising, initially, just as sharply as they have fallen.

BT. I think a little over optimistic.