House Prices Continue Tumble
House prices fell another 2.6% in November, according to mortgage lender the Halifax.
According to its latest survey, the annual rate of house price falls to 14.9%, compared to 13.7% rate in the 12 months to October.
The lender's calculation suggests that the average house price has now dropped by £31,485 in the past 12 months
The Halifax said the average property in the UK was now valued at £163,605, a level last seen in July 2005.
A similar survey from the Nationwide building society though indicated the pace of house price decline had eased off, with prices down 13.9% in the year to November.
"The combination of high house prices in relation to earnings, plus falling income levels and the decline in the availability of mortgage finance since the summer of 2007 has curbed housing demand, say the Halifax.
The lender's calculation suggests that the average house price has now dropped by £31,485 in the past 12 months, based on the average house price over the past three months with the average for the same three-month period the previous year.
Although a monthly year-on-year comparison suggests that prices may have fallen even faster, by 16.1%, although the Halifax that comparison is not an accurate one as it is suceptable to short-term price fluctuations.
According to the Bank there is a positive that can be taken from the survey as it indicates that sales, if not prices, had bottomed out.
The number of mortgages approved to finance house purchase was unchanged for the fourth successive month in October at a seasonally adjusted 32,000, again suggesting that housing market activity may be stabilising."
However, there are widespread fears that the current mortgage drought will become even worse in the coming year, unless the government's efforts to overcome the crisis in the banking industry and to revive mortgage lending come to fruition.
The Council of Mortgage Lenders (CML), among others, has warned that new lending may be negative in 2009, for the first time on record.
That means that there will be so little new lending by banks and building societies that it will be outstripped by borrowers paying off their mortgages.