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Property woes deepen
28th August 2008
This isn’t a gentle correction of house prices towards a sustainable long run position - the fall in UK property values is now steeper than at any time since the Nationwide Building Society first published their house price survey. Prices were 10.5% lower in August than they were a year ago. Prices fell by 1.9% compared with July and the average home now costs £164,654, which is more than £19,000 cheaper than the average price one year ago. Things are pretty bad in Spain too as this BBC news video from Hugh Pym illustrates. This week Taylor Wimpey announced a loss of £1.54bn in the six months to 30 June, saying it faced “very challenging” conditions.
Ordinarily the slump in prices ought to improve affordability and bring more first time buyers into the market - but with expectations for prices so pessimistic and mortgages remaining very difficult to get hold of, that glint of silver lining is unlikely to come to the rescue to the property sector for the time being.
PowerPoint version of the chart Housing_Market_0808.ppt
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.