Property Prices Continue to Fall
House price data from the Land registry showed that UK house prices fell on average by 0.4% in December, bringing the annual inflation rate down from 8.1% in November to 6.7% last month.
The land registry estimate that average UK house prices are now £184,469
The only 3 regions to avoid house price falls were the north east, east and London. The biggest house price falls occured in the East Midlands.
Statistics from the Land registry are backed up by data from other major house price surveys. For example, the Halifax index of house prices shows a drop in the annual house price inflation from 12% in July to 6% at the end of 2007.
The prospects for the rest of 2008, are likely to involve further monthly falls.
- Fall in mortgage lending (Council of Mortgage Lenders CML say lending is down 25% in December.
- Fall in confidence
- Credit crunch making mortgages more difficult to obtain and more expensive.
However, with inflation relatively low, there is arguably room for the MPC to cut interest rates. This may prevent demand falling too much. There is even evidence of some housebuyers looking for bargains as prices fall.
Original post by Tejvan R Pettinger