The squeezed credit condition has marked the doom for the realty market and the house prices are now at the lowest level.
London (Longdogfinance) Aug 08, 2008: On Thursday a data from Britain's biggest mortgage lender HBOS showed that the house prices in Britain fell at a record annual rate to their lowest level in July, which displays the mind-set for the economy darkens.
The prices actually fell by 1.7% on the month, which is significantly the sixth straight fall in a row, in accordance with the lender's Halifax house price index. It took them almost 10.9% lower on the year, which shows a sharp diminution than any time in the last housing collapse in the early 1990s.
"This continues the run of bad news on the housing market. Declines have been pretty unrelenting for the last six months," reported Dominic White at ABN AMRO. "This could go on for the next year," he replied.
Actually more than 20,000 pounds have been used off the value of the normal British home as the peak in costs in August last year and economists report that the cost might fall by another 10-15% as the investors have tightened up borrowing terms.
The unpleasant news came as the policy makers of Bank of England were holding their monthly rate-setting encounter but still no change is expected as inflation is almost double the target of central bank.Yet, almost all the analysts expect the Bank of England to cut the rates at some point, though not for few months, as the market slide of housing takes its toll on the wider economy.
The house builders have also declared thousands of job cuts and as such the furniture retailers have been hard hit as the quantity of property transactions has been halved from a year ago. However, earlier this week a report by ratings agency S&P analysed the house prices might fall by another 17 percent, which can alter the quantity of people in negative equity from 70,000 households to 1.7 million next year.
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