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The slump in house prices this month could be a sign of worse thing to come, with lenders reluctant to offer finance and buyers increasingly losing interest in the market.
The tightening in lending criteria has meant that mortgage finance has become more expensive and difficult to obtain. And with new buyer enquiries remaining very weak, mortgage approvals are close to half the level they were a year ago.
Market analysts say that the housing market will take longer to correct because house prices continue to drop despite the fact that the economy is not slowing significantly.
This was the seventh consecutive monthly fall, on par with the longest run of house price falls recorded during the early 1990s, and the largest single monthly decline in the index's history - greater than any drop recorded during the early 1990s housing market crash.
Annual house price growth fell further to -4.4%, the worst since December 1992.
House prices have now fallen by 7% since their peak at the end of 2007 - around a third of the 20% we are expecting by the end of 2009. All this is with the support of a still relatively healthy labour market.
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