Mar 27, 2009
Rate of house price declines is ‘faster’
Monthly house prices in England and Wales fell by 2 per cent in February, according to the latest figures from Land Registry.
The average house price is now £153,862 and represents an annual decrease of 16.5 per cent. In London the average price fell 15.6 per cent annually to £298,563.
It is the eighteenth month in a row where the annual rate of change has fallen, in contrast to 21 months of uninterrupted increases in the average annual rate of change between December 2005 and August 2007.
The North West was the region with the most significant monthly price fall with a movement of -4.1 per cent.
The most up-to-date figures available show that during December 2008 the number of completed house sales fell by 55 per cent to 36,341 from 81,300 in December 2007. In London 3,957 house sales were completed in December 2008 compared with 9,543 in December 2007. This represents a fall of 59 per cent.
In real term property prices have fallen 50% already even if this is not translated yet into prices. The FSA sent a loud message to lenders 2 weeks ago when he said if they stopped lending sensibly again he will cap mortgage lending loan to income ratios at 3x’s or less to ensure prices do not go up. The Council of Mortgage lenders recently confirmed that the average FTB’s mortgage is already 3x’s income . At peak the average loan to income ratio was just under 6x’s according to HBOS / Halifax figures. So in realy terms property prices have already fallen 50% because the amount of mortgage available has already halved. Every major economist is saying they are expecting 10 – 20% falls on top of the 20% falls already sustained. Prices are not going up for a long time, trying to support the inflated property market broke the banks . When property prices have fallen 50% I believe the average property price increase historically has been 1 – 2 % above inflation, so about 3 – 4% a year so it will take us 14 years to get back to 2007 prices.
Sorry already posted but thought it was worth pointing out that this is 16.5% Feb – Feb, with an average property price now put at £155000 then it must be 23% from peak, that is for the whole 18 months