House prices stumble further after January stability

According to the latest survey by Nationwide, it seems as though the hope that was in place of a recovery in January has been dashed by February’s figures as the housing market has not yet hit rock bottom.

It seems as though the worst is yet to come as the average house price fell by 1.8 per cent during the month, down 17.6 per cent compared with 2007 to £147,746.

Since the peak of the housing market in October 2007, the average property has lost 21 per cent and house prices have now fallen back to April 2004 levels.

It is now the 15th consecutive monthly fall in house prices and it is a further indication that the Bank of England’s successive cuts in interest rates, which has resulted in a 4 percent cut back, have failed in restoring demand for housing, mainly due to the lack of availability in mortgages.

According to the survey, first time buyers have had the greatest losses to bear as at the peak of the market at the end of 2007, the average first time buyer would have paid about £150,000 for a property borrowing up to 90 percent of the value of the house with monthly mortgage payments of £915.

Today a cheaper house at £125,000 would mean a mortgage of £530 a month, however they will have to stump up a minimum of 20 percent deposit which even on a property that is £30,000 cheaper would mean £25,000 up front.

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