UK House Prices Situation at 14 12 2007: Falling slowly

UK House Prices Forecast: Continued slight falls in most areas

Halifax Reports 1.1% Fall In House Prices

Britain’s biggest mortgage lender, Halifax, this week published its House Price Index for November.

It showed a 1.1% fall in the average UK house price – meaning that for the first time since 1995, house prices have fallen for three consecutive months. The fall meant that the annual rate of change fell to 6.3% - down from 8.9% in October.

Halifax described the pattern of mixed monthly falls and rises as a “typical feature” of a “more subdued housing market”. They observed that from July 2004 – June 2005, there were six monthly falls and six monthly rises – in response to interest rate rises during 2004.

Martin Ellis, Halifax Chief Economist commented that he believed the UK’s sound economy and strong buyer demand would “support house prices, preventing a sustained and significant fall."

Mortgage Approvals Down 32% from November 2006

New Bank of England figures have revealed that mortgage approvals in November were down 32% from the levels seen in November 2006 – a further sign that house-buying activity is slowing down considerably.

This is thought to be due to the combination of uncertainty over house prices and the effects of the credit crunch – which has caused many lenders to tighten their lending criteria.

Completed Sales Down 15%

New figures from RICS (Royal Institution of Chartered Surveyors) show that completed property sales are down 15% from this point last year. RICS also commented that new buyer interest in purchasing a house was down for the eleventh consecutive month.

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