UK Property prices fall

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by Kay Murchie

A report from HBOS Plc has established that property prices in the UK fell for the first time in 9 months last month, furthermore, mortgage rates increased and lenders became more wary.

The average cost of a property in the UK fell 0.6% to £198,500 from a month earlier compared with a 0.3% gain in August.

Property prices declined in 2 of the 12 regions that HBOS tracks in the third quarter. Prices fell 3.2% from the 3 months through June in Northern Ireland and fell 2.1% in northern England. Prices rose 2.3% in London.

However, there have been mixed signals in recent housing reports. Last month, The Royal Institution of Chartered Surveyors said property prices fell for the first time since 2005 in August but a fortnight later, Nationwide Building Society said prices rose at the fastest pace in 3 months.

In a separate report yesterday, Nationwide said that quarterly house-price growth slowed to 1.6% in the 3 months through September from 1.9% in the second quarter.

Property prices in the UK have trebled in the last 10 years resulting in consumers taking on a record £1.4 trillion in debt.

Nevertheless, the UK is faced with a lack of housing which has driven fuel gains in house prices. Gordon Brown has promised to prioritise homebuilding and announced proposals to build an extra 2 million homes in the UK by 2016.