U.K. house prices dropped 1.7% in September compared to the same point a year ago, according to data compiled by the Nationwide Building Society.
The monthly fall means that house prices fell 12.4% on annual basis, thought to be a direct knock on effect from ongoing turmoil in the mortgage market.
The average house price now sits at £161,797 a fall of £2,857 from last months average of £164,654.
Nationwide’s Chief Economist, said:
“House prices fell by 1.7% in September. This brings the price of a typical house in the UK to £161,797, 12.4% less than at this time last year.
House prices have now fallen for eleven consecutive months, but the monthly rate of fall has been almost unchanged in the last three months.”
“The less volatile three-month-on-three month series has also barely changed for the last three months, after accelerating in the first half of the year. This may suggest the beginning of some stabilisation in the pace of house price falls.”
Insuranceblog is inclined to strongly disagree with this analysis from Nationwide.
House prices in the middle bracket of 250000 to 500000 have dropped in most cases 25 to 30 percent in order to sell.
In fact ask any estate agent and they will tell you that it is only those who bite the bullet that sell.
The problem with the whole housing market is that this mid-sector price range is the most bound, with owners hanging onto unrealistic valuations and prices.
Unrealistic owners are refusing to drop their prices because many paid over the odds in the first place. In some cases a 30% drop would put them in negative equity.
A 30% adjustment in the market downwards would be a realistic correctional target in order to see liquidity and movement in this mid-sector, which is the only solution to the current credit crunch crisis.
When it happens – watch Nationwide eat their words!!