The Nationwide have today claimed that house prices have continued to fall in October and are now 15% cheaper than a year ago. The latest survey that was carried out by building societies has found that house prices have fallen by 1.4% in the past month. This takes the annual rate of fall from 12.4% to 14.6%. The price of an average house is now nearly £30,000 cheaper than it was a year ago. This will lead to a lot of people being in negative equity as they will be paying more money than the house is worth.
Nationwide have claimed that the fall in house prices is due to the reduction in sales, which are now at there lowest for 34 years. With a recession looming and the instability within the financial market; they are both having a major effect on the housing market. House prices have now dropped for 12 consecutive months. It makes it a lot harder for first time buyers to get there foot on the property ladder. As the banks try and return stability to the financial marketing it is expected that there will be a sharp cut in interest rates which may help buyers.
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