Thread: House prices fall as buyers 'go on strike'

House prices fall as buyers 'go on strike'

By Harry Wallop, Consumer Affairs Correspondent
Last Updated: 9:38PM BST 25/05/2008

House prices falls are accelerating as home buyers "go on strike", according to the latest analysis of the housing market.
The average house is now worth 1.9 per cent less than a year ago, a report from Hometrack will say today.

This is the largest fall recorded so far by any of the leading property indices and is the latest evidence that Britain's home owners should brace themselves for a protracted slowdown in house prices.

Property values have now fallen eight months in a row, says Hometrack, the property research company, with sellers achieving just 92.3 per cent of their asking price, on average. This is the lowest level since the survey began in 2001.

The report comes after a month of turmoil in the housing market, which has witnessed the end of a decade-long boom.

Nationwide and Halifax, the two largest mortgage lenders, have confirmed that house prices are now falling year-on-year; the Royal Institution of Chartered Surveyors said the mood in the market was its darkest since records began in 1978; Mervyn King, the Governor of the Bank of England, warned that house prices "are likely to fall further"; and Caroline Flint, the housing minister, revealed that "we can't know how bad it will get". There are increasing signs that the fall in house prices is starting to have a profound effect on the economy.

The number of housing transactions has started to fall dramatically, with a 26 per cent drop in the number of houses changing hands, official data shows.

The Daily Telegraph disclosed earlier this month that 1,000 estate agent branches had closed since the start of the year as the number of potential home buyers dried up. Mortgage brokers and removal men are also feeling the pinch.

Richard Donnell, the director of research at Hometrack, said the market was suffering from "a buyers' strike", with a drop of 6.7 per cent in the number registering with estate agents during May.

Brian Jackson, at Ellis & Sons estate agency in Merseyside, said: "Completed house sales are, this year, the lowest since our records began before the 1990s housing crash. Most vendors are reluctant to reduce prices and potential purchasers are too afraid to commit."

Most of the problems have been caused by the credit crisis, which has caused lenders to pull their most generous mortgage deals and increase their rates.

Nervous banks and building societies have also made it increasingly difficult for first-time buyers, insisting on substantial deposits before they are prepared to offer a loan.

http://www.telegraph.co.uk/news/uknews/ ... ke%27.html

I hope that this is not true, but I was reading an article on the net. It said that they are purposely destroying the American economy, so we will all be begging for the AMERO which will be worth a whole lot more. So we'll trade our soveignty for money.

I hope this article was way off the mark.



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