House prices fall but pace eases
The slump in house prices eased off in November with prices falling by just 0.4%, according to the Nationwide, the UK’s largest building society.
The mortgage lender said the rate of price falls “moderated significantly” when compared with October’s 1.3% fall.
House prices are down 13.9% from November 2007, easing from a 14.6% annual fall in October.
However, Nationwide warned that the weak economy would continue to put pressure on the housing market.
“In spite of the moderation in house price falls recorded in November, with the economy in recession, conditions do not appear very favourable for a swift recovery in the housing market,” Nationwide’s chief economist Fionnuala Earley said.
The slump in house prices eased off in November with prices falling by just 0.4%, according to the Nationwide, the UK’s largest building society.
The mortgage lender said the rate of price falls “moderated significantly” when compared with October’s 1.3% fall.
House prices are down 13.9% from November 2007, easing from a 14.6% annual fall in October.
However, Nationwide warned that the weak economy would continue to put pressure on the housing market.
“In spite of the moderation in house price falls recorded in November, with the economy in recession, conditions do not appear very favourable for a swift recovery in the housing market,” Nationwide’s chief economist Fionnuala Earley said.
Earlier this week the former head of the HBOS mortgage bank, Sir James Crosby, recommended that the government take direct action to stimulate the flow of mortgage funds to the UK banking industry.
He warned that otherwise new mortgage lending might dwindle to a complete halt.
And that in turn would lead to a further downward spiral of sales and prices which would make the impending economic recession even worse.
In evidence to a Parliamentary committee, Mervyn King, the governor of the Bank of England, said no issue was more important at the moment than the restoration of general bank lending.
“The government’s massive fiscal boost may prevent the downturn in economic activity being as severe as would otherwise be the case but it will not prevent a sharp jump in unemployment over the coming year,” said Simon Rubinsohn of the Royal Institution of Chartered Surveyors (Rics).
“The real issue for the property market remains the collapse in transactions rather than the necessary adjustment in prices,” he added.