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November 27, 2007

Property prices decline for a second month

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by Kay Mitchell

Property prices decline for a second month

Figures from the housing information group, Hometrack, show that property prices fell for the second consecutive month during November.

The average cost of a home in England and Wales fell by 0.2% to £175,700. Prices fell 0.1% in October which helped to slow the annual rate of house price growth to just 3.6% which was the lowest level since July 2006.

Next year, Nationwide Building Society is predicting the weakest housing market in 10 years with a slowdown in economic growth after the problems in the US sub-prime mortgage market.

Prices fell across 20% of postcode districts according to Hometrack, particularly in southern England, where demand results has slowed the most.

Richard Donnell of Hometrack said continuing focus on the fall-out from the credit crunch, together with high interest rates, is resulting in widespread caution among homeowners, the majority of whom do not need to move and who are in ‘wait and see’ mode.

Howard Archer, an economist at Global Insight said there is increased speculation that the housing market could see a sharp correction over the next few months which is putting off potential house buyers.

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