House prices fall again in October
According to recent figures house prices have fallen for yet another consecutive month, and after a fairly small price fall in September figures show that house prices have now fallen by a further 2.2 percent in October. The figure comes from the Halifax, and officials from the lender have said that the October fall has brought the annual house price drop to 13.7 percent. The average house price has now fallen to £168,176 according to the Halifax, which is nearly £30,000 lower than a year ago.
House prices are now said to be back to the level that they were at in October 2005 according to the Halifax. Problems within the mortgage market coupled with economic problems has left the whole housing sector still vulnerable and challenging, said Halifax officials. Figures have also recently been released by the Nationwide Building Society, which also shows significant house price falls over the last year, although the annual fall from Nationwide is slightly bigger than Halifax, at 14.6 percent.
One Halifax official said that whilst house prices had fallen significantly over the past year the encouraging news was that property was starting to become far more affordable, and there were signs that house prices were starting to stabilise.
He said: “The house price to average earnings ratio has fallen below 5.0 for the first time for four and a half years. We expect a further improvement in the ratio over the coming months. The number of mortgages approved to finance house purchase was broadly unchanged in September for a third successive month.”
An official from the Royal Institute of Chartered Surveyors stated: “Prices are now falling at a faster pace than in the recession of the early 90s and, with mortgage finance still in short supply, the likelihood is that the picture will continue to deteriorate in the near term. Interest rate cuts by the Bank of England should gradually provide some support but the key issue is the extent to which these reductions are passed on to High Street lending rates.”
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