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House price falls 'are even worse in county'
The price of a house has fallen by double figures in a year for the first time ever, according to the Halifax.
The lender yesterday released figures which showed the cost of a home fell by 1.8 per cent in August, a 12.7 per cent year-on-year drop.
The average house now costs 174,167, below the government's new house price level and a return to levels last seen in February 2006.
Charles Orlebar, chairman of Northamptonshire Estate Agents Association, said: "I would agree with that. Locally there has probably been a higher fall than that. The underlying fact here is the lack of affordability."
Mr Orlebar said previously, someone on a 22,000 a year salary could borrow 130,000 but now could only borrow 90,000, despite having to pay the same to service the loan.
He added: "Prices have to come down to get the buyer back into the market.
"There is no other buyer out there, so prices have got to fall more than they have. When you've got economists saying there's another 20 per cent to come off prices it will be based on that."
Mr Orlebar said the situation would begin to change as lenders became more generous, with signs already of an increasing number of mortgages, but he thought prices would not level off until spring.
Annual house price deflation has hit double figures. for the first time. Last week Nationwide showed prices fell by 1.9 per cent in August and 10.5 per cent overall.
Halifax chief economist Martin Ellis said: "The pressure on householders' income, together with the reduction in the availability of mortgage finance due to the global financial markets crisis, is resulting in both lower property prices and activity levels.
"This week's announcement on stamp duty is a welcome development and will benefit a significant number of homebuyers, particularly outside the south east of England. Market conditions, however, will remain challenging."
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Sunday 27 May 2012
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