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TSH News
2008 Prices
Tue Jan 6 2009
House prices 'fell 15.9% in 2008'
Prices and sales are likely to keep on falling
House prices fell by 15.9% last year, according to the latest survey by the Nationwide building society.
It says prices fell by another 2.5% in December taking the average house price down to £153,048 - £29,000 less than a year ago.
The building society says that as prices have now fallen f |
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| or 14 months in a row they are 18% lower than their peak in October 2007.
The Nationwide's chief economist said last year was a "year of turmoil".
"The disruption in the financial markets worsened throughout 2008 and had larger implications for the real economy than we anticipated a year ago," said Fionnuala Earley.
"We did not anticipate the speed of house price falls or the extent of the global and domestic economic slowdown," she added.
Downturn
The Nationwide's survey confirms last week's report from the Halifax which also said that prices had dropped by 16% in 2008.
Last year saw the biggest annual house price drop on record, which was prompted by a sharp fall in the availability of mortgage funds from lenders who had been hit by the international credit crunch.
This led to a sudden drop of in demand from buyers at a time when house prices had already reached record levels, as a result of which sales are currently down by 60%.
With mortgage approvals suffering an even bigger fall, sales and prices are expected to continue to drop for the time being.
"Prices have further to fall before significant numbers of buyers will be willing to return to the market," said Ms Earley.
Recession
Ms Earley warned that the developing economic recession would drag the housing market down further.
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