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!

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.

Some analysts are talking of more losses in 2009 for housebuilder Redrow and, with so many adjustments, that is likely. More worrying is that Redrow is expecting to be cash negative for the next six months, in spite of discounting its homes and not committing to more land purchases. With one-sixth of the market value in the hands of short-sellers, and a hedge fund holding a 27% stake. A rally since the start of July provides a possible exit window.

Now 200p

NEW YORK WASHINGTON, Sept 24 (Reuters) - Prices of existing homes in the United States suffered a record drop in August while the sales pace slowed and the overstock of homes shrank, the National Association of Realtors said on Wednesday.

The pace of existing home sales decreased 2.2 percent to a 4.91 million unit annual pace while the median national home price declined 9.5 percent to $203,100.

Economists polled by Reuters were expecting home resales to fall to a 4.93 million-unit pace from the July rate of 5.02 million units. The dollar extended losses against the euro after the data.

The realty trade group said in a report that as many as 2 in 5 home sales are by borrowers who have seen their property lose value or are facing foreclosure.

'The big question now is whether lending is so tight that sales are being hurt,' said Gary Thayer, senior economist at Wachovia Securities in St. Louis, Missouri. 'If we can work through the current lending difficulty, sales are likely to improve later this year.'

The inventory of existing homes for sale fell 7.0 percent to 4.26 million from the record-high overstock reported in July.

LONDON, Oct 2 British house prices fell 1.7 percent in the month of September to post their biggest annual drop since comparable records began in 1991, the Nationwide building society said on Thursday.

Interest rate futures rallied as investors speculated the figures increased the chance of an interest rate cut by the Bank of England next week, although analysts cautioned that a cut in itself would do little to halt sliding property values.

'Even if the Bank of England cuts interest rates as early as next week, as we now expect, this is likely to provide only very limited support to the housing market given that elevated money market rates are exerting upward pressure on fixed rate mortgages,' said Howard Archer, economist at Global Insight.

Nationwide said house prices in August were 12.4 percent lower than a year earlier. Before 1991, Nationwide conducted quarterly house price surveys. The largest annual fall on that measure was a 10.7 percent drop recorded in the early 1990s.

The 11th consecutive monthly decline highlights the sharp reversal of fortune for the property market since the credit crunch took hold last summer, bringing an end to a decade in which property values almost trebled.

'Casting back one year there have been some astonishing and unpredictable developments in the housing and financial markets,' said Fionnuala Earley, Nationwide's chief economist.

'We would need to see a significant shift in consumers' sentiment before we begin to see any real recovery in activity and subsequently house prices.'

September's decline pushed the average price of a property to 161,797 pounds ($286,060), the lowest since February 2006.

The precipitous drop in house prices both in Britain and overseas has been a key element of the crisis that is rocking the global banking sector and threatening to send many industrialised economies into recession.

A reluctance by banks to lend to each other had led to a sharp increase in wholesale funding costs in recent weeks. Several mortgage providers have responded by raising their own mortgage rates.

Policymakers are concerned a weakening property market could feed a vicious downward spiral of falling consumer demand and rising unemployment.

Futures markets suggest the Bank of England will cut interest rates to 4.75 percent next week and to 4 percent by this time next year.

A Reuters poll this week showed 45 of 66 economists polled Sept. 29-Oct. 1 said the BoE would hold rates at 5.0 percent next week. A cut by the end of the year is now almost a certainty with forecasters in the poll.