UK house prices fall at fastest rate in 12 years (Pop goes the HOUSING BUBBLE)

Financial Times ^ | 12/21/2004 | Friederike Tiesenhausen Cave,

[nanak]

House prices fell at their fastest pace for 12 years in November but there are signs that potential buyers are regaining interest in the property market, a survey said on Monday.

The headline indicator of the Royal Institution of Chartered Surveyors fell from -40 in October to - 48 last month, the lowest since December 1992. Almost two-thirds of surveyors reported falling house prices and only 2 per cent saw prices increase.

Unsold stock on surveyors’ books has risen 9 per cent in the past year as far more homes have come onto the market than new buyers. The number of completed deals was down 32 per cent last month compared with a year earlier.

Rics said surveyors were still pessimistic about the near-term prospect for prices but were becoming increasingly confident about the outlook for turnover as more people showed interest in the housing market.

Demand stopped deteriorating and buyer enquiries stabilised in November following six months of falls. In London, enquiries rose for the first time since March.

Ian Perry, residential housing spokesman, said: “The decision by the Bank of England not to increase interest rates further and the healthy economy are allowing confidence to consolidate. Sales usually pick up in the new year and I am confident that this year will be no exception.”

Rics forecasts a 3 per cent increase in UK house prices in 2005. The first half of the year was likely to be quite weak but the market would experience a modest recovery towards the end of the year.

In November, house price falls were most pronounced in the South East and the South West, with prices once again on the rise in Scotland. Price falls in London, which heralded the current nationwide slowdown, eased slightly.

The strongest influx of new selling instructions last month was in the north of England and Wales, which points to further price falls to come in those regions.

Separately, figures from the Council of Mortgage Lenders showed a further 7 per cent month-on-month fall in the number of new loans to fund a home last month. Loans for house purchase stood at 85,000 in November, down 25 per cent from 113,000 a year ago.

However, remortgaging remained strong, with the volume of money lent as part of a remortgaged loan increasing by 4 per cent between October and November.

Michael Coogan, CML director general, said: “The buoyancy of the housing market in the first half of the year means that the number of transactions in 2004 is likely to reach a 15-year high.”

But he added: “It is inevitable that there will be a decline in activity going forward. anuary and February are traditionally weaker months for lending, and so we expect the figures to reflect a marked slowdown until the spring.

[American Vet Repairman]

Took a tour in London in 2001. The joke from the guide was;
"What can two million pounds buy? In Kensington an apartment-in Scotland a castle with a farm."

[shekkian]

Perhaps their rampant crime rate is dragging property values down.

[Constitutionalist Conservative]

Here's an interesting article suggesting that UK's economy may be getting ready to take a dive, possibly followed not long after by USA's.

[theDukeofPlazaToro]

Perhaps their rampant crime rate is dragging property values down.

No it's the socialist government raising taxes, and imposing suffucating regulations.

[monkeyshine]

What can $3 million dollars buy? A house in west Los Angeles or a fully stocked 500 acre farm with 3 houses and 3 barns in West Virginia. Or, if you had the courage, a 5000 sq ft mansion on 3 acres in Panama or Costa Rica and $2,500,000 worth of Treasury bills.