Tuesday July 1, 12:27 PM
Thousands Wiped Off House Prices
By Sky News
House prices in the UK have fallen by 6.3% in the past 12 months - the biggest annual drop in 16 years. That is the equivalent of £11,500 off the value of every home in the country. According to the Nationwide Building Society House,
prices dropped by 0.9% in June.But - on a slightly brighter note - that was less than half the figure recorded in May. The Nationwide adds that although prices have fallen dramatically, they are still 4% higher than 2 years ago. After eight consecutive monthly drops, a typical house in Britain now costs £172,415. The Nationwide survey comes after Bank of England figures showed mortgage
approvals for house purchases had slumped to a record low. The BoE said just 42,000 new loans were agreed for people moving during May. That was 28% below April's level and 64% down on the figure for the same month of 2007. Fionnuala Earley, Nationwide's Chief Economist, said the house price falls makes a rise in interest rates to curb inflation - currently at 3.3% - less likely. Ms Earley said: "The adverse inflation developments along with the surprisingly strong retail sales data clearly make it less likely that the Bank will be able to rapidly reduce interest rates. "But we still think the next move in rates will be down. "Our central expectation is that wage growth will remain stable, consumer spending will come under increasing pressure and the economy will continue to slow. "If this proves correct, the (Bank) should feel able to adjust rates before the end of the year."
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