UK: House price fall moderates, prices still down 13.9% in year
Today the Nationwide released their monthly UK-wide figures on house prices and the numbers were better. House prices fell 0.4% in the last month, bringing the annual fall to 13.9%, down from 14.6% in October.
Nevertheless, this is the 13th month in a row that house prices have fallen in the UK. Obviously, the UK is poised to have a sharp property fall that is worse than in the early 1990s.
Fionnuala Earley, Nationwide’s Chief Economist has been giving a more downbeat prognosis of late. She had this to say:
“Turnover rates in the housing market have fallen to historic lows, even below the levels in the 1990s
when the economic conditions were worse than they are today. At the trough of the market in Q4 1990, interest rates were at 14% and there were almost double the number of unemployment claimants, yet a greater proportion of owner occupiers were taking out mortgages to move house. The significant difference today is the financial market shock which has led to the severe tightening of credit. In Q4 1990, 60% of first time buyers were taking out loans with LTVs above 90%, today the equivalent proportion is 14%. While this may reflect less desire on the part of borrowers to borrow
at high LTV, especially given its higher cost, it also implies that part of the reduction in turnover today is likely to be due to the availability of finance at higher LTV.”
Rate of price fall moderates in November – Press Release, The Nationwide