Safe as Houses
Britain’s housing prices are down again but still up for the full year, according to one of UK’s leading credit society.
Nationwide has announced that housing price have fallen in March by 0.6 per cent, it is the fifth consecutive loss and extends the loss of 0.5 per cent recorded in February.
Property prices are still up for the full year by 1.1 per cent the lowest growth in 12 years.
“However, prices are still 11 per cent higher than two years ago and 47 per cent higher than five years ago,” said Nationwide’s chief economist Fionnuala Earley.
The major concern about these figures is that housing prices are continuing to deteriorate at a stronger pace.
While it is not as dramatic as the double digit falls seen in the US, the US example shows that a reduction in house prices can have a dramatic effect on the wider economy.
Housing price is one economic indicator that many analysts look at when gauging Britain’s long-term economy health.
It is an important indicator because for many people their homes are their biggest investment and deterioration in price is a reduction in household wealth.
If housing prices do not recover then Britain, like the US, may face a more severe slowdown in economic growth that affects more homeowners in the UK.
April 8th, 2008 at 9:56 am
Well the house prices are continuing to fall. There might be some support in the long term, but I think most in the know are expecting the full-year housing process to fall into the negative pretty soon.
The question is after such a long period of growth will we experience a long period of declining prices?
It was interesting that prices are falling despite a strong economy, low interest rates and high employment. What will happen when all that turns around? Could a more dramatic economic slowdown pull the rug out from under housing prices?
I am a home owner but instead of panicking about housing prices I am looking for an investment property. Buy on bad - sell on good, that rule applies to property as much as it does with shares or any other investment.
But one thing I will be sure of is that I can service a loan for a protracted period and I have the courage to hold on to my investment until the turnaround and I can ride the wave of strong demand.