Halifax fuels housing market worries as prices dive again
Friday 05 October 2012
Halifax fuelled fears about the state of the housing market yesterday as the nation's biggest mortgage lender reported a third monthly fall in house prices.
The 0.4 per cent decline in property prices in September replicates what the Nationwide's index found earlier this week. Year-on-year prices are also down, with the average property price falling to £159,486 in September, a 1.2 per cent drop on the same month in 2011.
The news of another price fall coincided with the Bank of England's decision to keep UK interest rates on hold at 0.5 per cent and to hold off from any more quantitative easing. But economists predicted the Bank could pump some more stimulus into the economy at November's meeting, which will be after third-quarter GDP figures.
"Next month's decision will take place against a background which might make members think a bit harder as to whether more QE is justified. We still expect the MPC to sanction a further £50bn of QE, but the decision could be a close call," Philip Shaw, the chief UK economist at Investec, said.
The recession and continuing difficulties securing mortgages, despite the Bank of England's £80bn funding for lending scheme, seems to lie at the heart of the moribund UK property market. However, there is no sign of a general house price crash as occurred in 2007 and 2008, with some parts of the country, notably London, still seeing rising prices.
Matthew Turner, director of Astute Property Search buying agents, said: "While low mortgage payments may be supporting house prices, the ongoing difficulty to secure finance at higher loan-to-values is preventing the market from moving forward."
Underlining the difficulty many face getting a home loan, Nationwide Building Society has announced that it is withdrawing from the interest-only mortgage market. Nationwide said it was pulling out because the product was now "niche" and offered a "disproportionate amount of risk". Existing borrowers will be allowed to continue with their deal, though.
Co-creator Mark Gatiss dropped some very intriguing hints ahead of the BBC drama's return next year
London 'needs affordable housing'
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