💾 Archived View for gmi.noulin.net › mobileNews › 748.gmi captured on 2024-08-18 at 23:27:34. Gemini links have been rewritten to link to archived content
⬅️ Previous capture (2024-05-10)
-=-=-=-=-=-=-
2008-11-06 11:05:51
House prices fell by another 2.2% in October, says the Halifax, pushing the drop in house prices to 13.7% over the past year.
The latest fall means that the average UK home now costs 168,176, nearly 30,000 less than a year ago.
The Halifax said this meant prices were now back to the level of October 2005.
The lender said conditions in the market remained "challenging" because of economic conditions and the dearth of mortgages.
The Halifax's latest survey of house prices chimes closely with that of its big rival the Nationwide building society, which last week said prices had fallen by 14.6% in the past year.
When comparing the average price in October with the average price a year ago, the Halifax survey suggests that prices are down by 15%.
But the Halifax argues that this figure can be distorted by month-to-month fluctuations, and that the better method is to compare the average price for the past three months with the average price for the same period a year ago, which produces its current estimate of a 13.7% annual fall.
Signs of hope
Despite the continuing falls in house prices, the lender's chief economist, Martin Ellis, said there were signs that the market was starting to stabilise and that the affordability of homes was "improving significantly".
"The house price to average earnings ratio has fallen below 5.0 for the first time for four and a half years," he said.
"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," he added.
Mortgage drought
Mortgage costs for some borrowers will come down if, as expected, the Bank of England announces a significant cut to its Bank Rate at midday on Thursday.
But, as the Council of Mortgage Lenders (CML) pointed out on Tuesday, the main barrier to people taking out home loans is not the cost of servicing a mortgage, but the dramatically increased size of the deposits that are now required by nearly all lenders.
Since the start of the credit crunch and the international financial crisis in the summer of 2007, lenders have reined in their lending, preferring to lend only to those borrowers with significant equity in their homes or who are able to put down large sums as deposits when buying for the first time.
The Bank of England recently reported that banks and building societies expect to restrict their lending even more in the coming months.
Not only have 100%-mortgages disappeared but so have the once traditional 95%-mortgages, and most deals currently on offer from lenders typically require a deposit of at least 10% or 15%.