House prices fall by 1.7 per cent in July according to Halifax. This year’s overall drop means house prices have now fallen around 11 per cent, which is a sharper decline than the last housing crash in the UK. Repossessions are up by 48 per cent which is the highest figure in 10 years.
Injections of huge amounts of liquidity into the money markets by central banks can be considered partially successful. Interbank interest rates have narrowed showing a slight increase in confidence between banks lending to each other however, in terms of the UK housing market, the crisis has only just begun, according to the Telegraph.
“In the UK, incredibly, one year ago house prices were rising at the rate of 10pc per annum. One year on, the housing market is in free-fall, with prices sliding at their fastest rate on record. Indeed, they are already about 10pc below last autumn’s peak. I reckon that they may have another 25pc or so to go.”, says the Telegraph.
According to BBC News, the largest UK employers’ organisation, CBI, has warned the economy is deteriorating faster than most had anticipated.
“Economic activity is slowing in all key sectors of the economy, business confidence is waning and falling house prices and tight credit conditions have dented consumer spending.”, reports the BBC.
Amidst all this bad news the Scotland on Sunday reports a bit of hope for home buyers. The Bank of England is holding the base rate at 5% “allowing some of the UK’s biggest banks to reduce their borrowing costs.”
Although these moves come at a time when repossessions are high compared to last year, adjustments are being made by Nationwide and Abbey who are offering attractive deals to help home buyers and current mortgage holders looking to remortgage for a better deal.