House prices continue to fall
According to recent reports house prices in the UK have continued their downward spiral for the month of June, with a number of leading mortgage lenders and banks publishing figures that make for gloomy reading. One of the latest lenders to release house prices figures for June was the Halifax, which confirmed that house prices had fallen for yet another month in June, although the drop in values was not as large as the 2.5% that was seen in May.
According to officials from the Halifax, house prices in the UK have now dropped by an average £20,000 compared to last summer, which is when house prices in the UK peaked before starting to come down.
However, although house prices are now lower than they were a year ago, industry officials are quick to point out that they are higher than they were two, three, or five years ago, and in the past decade they have rocketed by around 300% according to one recent report.
One industry official stated: ‘The average UK price has risen by 150% during the past decade from £72,096 to £180,344; an increase of £108,248. Prices have risen by 196% since the trough of the 1990s housing market downturn in July 1995. A strong labour market, low interest rates and a shortage of new houses underpin housing valuations. Our research shows that the labour market is the key driver of the housing market. Employment is at a record high.’
However, many think that this is the start of the downward spiral, and house pries are set to continue falling.
One economist recently stated: ‘The latest data on the housing market continue to be very worrying, and there appears to be no let up in the current downward spiral. Clearly, the downward pressure on house prices coming from very low activity, stretched buyer affordability and tight lending continues to bite very hard.’
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