House prices in the UK have fallen for the second consecutive month.
According to the Royal Institution of Chartered Surveyors, 14.6% more chartered surveyors were reporting that house prices were falling. This is a bigger % than the 3.3% more who reported falling house price in August.
It is worth noting that this is not the only statistic on house prices. Quite often groups offering house price statistics can disagree on the actual statistics. (At the moment there is a curious lack of any official government house price statistic)
However, it confirms a general trend in the downward movement of the UK Housing Market.
Most worryingly was the marked drop in demand from first time buyers. This is unsurprising given the rise in house price to income ratio. Furthermore this trend has become more significant with the change in attitude to mortgage lending.
Previously, banks were willing to lend unconventional mortgages, such as interest only, 100% mortgages, and self certification mortgages. However, with a global credit crunch, selling on these mortgage have become more difficult. Therefore, banks are much more cautious in lending mortgages to first time buyers.
However, despite these factors pointing to a potential house price crash, I think that a crash is still unlikely.
The economy is still performing reasonably well. see Prospects for UK economy 2008.
Interest rates are likely to peak at 5.75%, the next move could be downwards.
There is still a fundamental shortage of supply, compared to the growing demand. However, I think a reasonable prediction for UK House prices in 2008 would be for a marked slowdown in house price growth, possibly even a period of stagnation.
I think for a house price crash to occur, we would need the UK, to enter into a recession, or very low growth.
said said house prices declined in September for the second month in a row with 14.6%
See also: Why House Prices may not fall
- House Prices fall at the Guardian
Well not only in UK, it is worldwide. Rate of property are going down every where. But I think it is temporary and soon we will see increase in rates.