UK house prices fall most on record
House prices are falling at the fastest annual rate on record, according to the latest survey from the Nationwide Building Society.
By Jamie Dunkley
Last Updated: 8:42AM BST 02 Oct 2008
House prices fell 1.7pc last month, according to the latest survey from Nationwide
The average UK home lost 1.7pc of its value in September, leaving prices 12.4pc lower than they were a year ago. The drop eclipses the worst annual fall during the house price crash of the early 1990s, when in the final three months of 1990 prices were 10.7pc lower.
According to the widely-watched survey, the average home is now worth £161,797, down from £164,654 in August.
Nationwide expects the next two years to be "difficult" for the once-booming housing market. Prices have been hit as the credit crisis forces banks and financial institutions to pay more for the money they then pass on to potential homeowners.
Despite co-ordinated and sustained action by the Bank of England, America's Federal Reserve and the European Central Bank in recent months, there is little sign that money is going to become much cheaper for banks to lend.
Fionnuala Earley, chief economist at Nationwide, admitted that "we would need to see a significant shift in consumers' sentiment before we begin to see any real recovery in activity and subsequently house prices."
Sterling retreated on the news and was trading below $1.77, while the FTSE 100 hovered below the 5,000 level.
The continued deterioration in the housing market increases pressure on the Bank of England's Monetary Policy Committee to cut interest rates when it meets next week. Despite the rapid slowing of the UK economy, the MPC has left interest rates at 5pc in recent months as it seeks to bring inflation closer to its 2pc target.
However, Howard Archer, an economist at Global Insight, warned that "even if the Bank of England cuts interest rates as early as next week, as we now expect, this is likely to provide only very limited support to the housing market given that elevated money market rates are exerting upward pressure on fixed rate mortgages."
Marks & Spencer chief executive Sir Stuart Rose added to the calls for the Bank to cut after seeing sales at the retailer decline 6.1pc in the past three months.作者: Kevin 时间: 2008-10-2 18:11