In gloomy accord with Nationwide seeing UK house prices falling across every single region for the first time in 30 years, Halifax has now released monthly figures for March estimating UK house prices have dropped 2.5%. Some areas are down twice that.
House prices have now fallen year on year. In March 2007, Halifax had the average UK house price at £194,094. For March 2008 it’s down to £191, 556. (Halifax doesn’t highlight the fact, instead focusing on three month rolling averages to record a small year on year gain.)
Key data from the Halifax report
- House prices fell by 2.5% in March. Prices in Quarter 1 were 1.0% lower than in 2007 Quarter 4. House prices in March were 1.1% higher than a year earlier.
- The biggest rises were in Greater London (1.6%), East Anglia (1.4%) and East Midlands (2.2%).
- There were price falls in a number of regions, with the biggest falls in West Midlands (-5.0%) and Wales (-4.7%).
Amusingly for students of spin, the Halifax obfuscates these numbers with a few paragraphs of Don’t Panic waffle:
We expect there to be a modest (low single digit) decline in UK house prices this year. Any declines, however, should be viewed in the context of the significant price rises over recent years. UK prices have increased by 171% over the past ten years and by 51% over the last five years. The average UK price has risen by £120,860 during the past decade from £70,696 to £191,556.
All 12 UK regions have experienced substantial house price rises over the last ten years, ranging from 146% in Scotland to 271% in Northern Ireland. Average prices increased by 191% in Greater London, 188% in Wales and 150% in West Midlands during the period.
Sound economic fundamentals are supporting house prices. A strong labour market, low interest rates and a shortage of new houses underpin housing valuations.
Etc etc, waffle waffle. If you want to dig deeper, you can download Halifax’s house price index as a PDF.
Certain people with a sense of history must be getting a bit twitchy in Downing Street. Gordon Brown must surely accept by now that crazy near-200% increases in house prices over a decade flatly contradicted his endless boast of, “No more boom and bust”. Coming from an intelligent man with a deep knowledge of economic history, this denial of economic cycles always smacked of political posturing and hubris.
So we’ve had a boom and now we’ve the beginnings of the bust. The Bank of England is certain in my view to cut rates on Thursday by 0.25%, but whether that can reduce the interbank lending rate that has increased mortgage rates – let alone stem the steady withdrawal of mortgage products – remains to be seen.
Don’t wait for officials to ride to the rescue: make sure you’ve taken these simple steps to avoid the worst of the credit crisis.