Tuesday, July 01, 2008
If the future path of the U.K. housing market is anything like the present course for the one in the U.S., the strength of the lower rungs of their "property ladder" will soon be tested.
More than likely, the British will soon share the same fate as their American counterparts, watching the odd juxtaposition of giddy home improvement reruns and other lively television fare about real estate while markets tumble around them.
Back in 2005, no one would have thought that things would work out this way.
The ascent of the U.K. real estate market was always about a year ahead of the inflating bubble in the U.S. and, up until it was perfectly clear that the American housing bubble was bursting, optimists would point across the pond for clear evidence that prices could indeed reach a "permanently high plateau".
Well, from recent accounts, it looks as though that plateau may be moving lower and may not be as permanent as originally believed. The Telegraph provides the following report to fill in the details and the wonderful graphic, reminiscent of the U.S. housing market in 2005-2006, comes from a related story at the newspaper.
House prices fall at fastest rate in 16 yearsThe phrase "get on the housing ladder" will surely go into the history books alongside other memorable quips from the U.S. such as "anyone who can fog a mirror can get a loan".
House prices in Britain have fallen at their fastest annual rate for 16 years, new figures show.
Average property values in June stood 6.3pc cent lower than a year before - the biggest such drop since the 1990s crash, the Nationwide building society said.
Prices have now fallen for eight consecutive months, with 7.3pc, or £13,500, wiped off the price of an average house since the peak in October. The average British house is worth £172,415, having lost £1,168 in value in just a month.
The stark figures came as property experts warned that the current housing slump could even exceed the worst periods of the past thirty years.
Separate data suggests that first time buyers have all but disappeared from the market because of the credit crunch.
Personal finance research house Defaqto estimated that the average up front cost of getting on the housing ladder for the first time – including stamp duty, fees and a deposit – now stands at £33,738 because lenders are cracking down on borrowers with weaker credit histories - a rise of almost 50 per cent in a year.