House prices falling at fastest rate in 25 years

Source: Telegraph.co.uk

Home owners have been dealt a double-whammy of doom, as figures showed that house prices were falling at the fastest rate in at least 25 years and the Bank of England failed to cut interest rates.

The Base rate was left at 5 per cent, despite the increasing threat of recession.

While the move was widely expected by economists, it will further add to the pessimism in the housing market, which has been rocked by falling prices and very low levels of activity.

Figures from Halifax, the country’s largest mortgage lender, showed that the average house has lost £25,434 in value over the last 12 months to reach £174,178, equating to a drop of 12.7 per cent.

The lender has never recorded such a large annual fall since it stared its monthly survey in 1983.

The average house price is now just below the Government’s new, temporary stamp duty threshold of £175,000.

Halifax’s chief economist Martin Ellis said: “The pressure on householders’ income, together with the reduction in the availability of mortgage finance due to the global financial markets crisis, is resulting in both lower property prices and activity levels...”

More: Telegraph.co.uk