House Prices In Sharpest Fall Since 2009
House prices have recorded their biggest year-on-year decline in almost threeyears, according to new figures.
Average prices have plunged by 2.6% since last year and fell by 0.7% in July alone, according to the Nationwide house price index.
It is the fourth decline in five months and makes the average home in July worth £164,389 - down from £165,738 in June.
June's prices were also 1.5% down on the same period last year. Overall, prices now stand at some 13% below their 2007 peak.
The study said the Bank of England's new funding for lending scheme could give a boost to the housing market, but with the eurozone crisis continuing, Nationwide expects to see only a "modest recovery" in the coming months.
The latest research comes after the British Bankers' Association - currently embroiled in the Libor rate-fixing scandal - found that mortgage approvals slumped to their lowest number in at least 15 years in June.
Nationwide chief economist Robert Gardner said: "The weaker price trend observed in recent quarters is unsurprising, given the disappointing performance of the wider economy."
"Data released last week revealed that the UK recession intensified in the three month to July, with the economy contracting by 0.7% quarter on quarter.
"This disappointing outturn can be only partly explained by unusually wet weather and the impact of an extra bank holiday during the quarter," Mr Gardner said.
"Indeed, the UK economy has contracted by 1.4% over the past nine months, and is now 4.5 percentage points smaller than it was in Q1 2008."
However, the building society admitted that although the statistics appear grim, the UK economy has shown resilience compared to other countries like the US and Spain.
It is thought the strength of the UK labour market, driving demand for homes, has probably helped prop up the housing sector.
"However, this pattern of negative economic growth and steady employment growth cannot be sustained indefinitely," Mr Gardner said.
"Much will therefore depend on the ability of the UK economy to gain momentum in the quarters ahead if labour market conditions, and therefore demand for homes, are to be adequately supported."
what do you think?
Good news they need to fall ,there way overpriced property bubble still stands while wages wont meet a mortgage cost,Bad news for people who bought on inflated prices,do love the blame game "Rain Bank Holidays" now lets rewind a decade ,mortgage 3.5x earnings,most now would not even make the amount needed,heavy deposits out of reach of most buyers[40%,shared ownership yup good way to save deposit but and thats about it, now with this Liebour,i guess this was the true meaning of a Fixed Rate Mortagage,so with job uncertainty,low wages high cost of living,no wonder its not moving,they need to fall a lot more like the last recession did before it recovers
Good, houses are for living in, not making money from. The political decision to stop council house building has put owning a house out of the reach of millions of people by inflating the price of private housing. The chains of a mortgage have replaced the iron chains of the slave.
Thank goodness for that. Building an economy on house prices that are artifically high is a recipe to disaster. I do fell sorry for those who have been left in negative equity. People need to realise that a house is not a form of investment and not an easy way to earn quick money. This has nothing to do with selling council houses which both labour and conservative have been involved in, but who am I as a home owner can say why sombody is not allowed to own their home.