House price fall fastest for 18yrs

By IAN KING
Business Editor
Published: Today
HOUSE prices are falling at the fastest rate for 18 years, it was revealed yesterday.
They tumbled another 1.9 per cent this month.
And that took the annual rate of decline to 10.5 per cent — not seen since the 1990 property crash.
The drop was revealed as a CBI survey showed high streets are suffering their worst sales slowdown for a quarter of a century.

House prices have now fallen for ten months in a row.

And Nationwide’s chief economist Fionnuala Earley warned a recovery was unlikely in the near future.

She said builders had reported much lower interest in new houses.

Revive

And the large number of unsold properties on estate agents’ clogged books would continue to damp down prices.

Ms Earley predicted the Bank of England will cut the base interest rate.

But she warned: “The extent to which this will revive the mortgage and housing market is likely to be limited while overall confidence in economic and housing market conditions is low.”

Shadow Chancellor George Osborne said the market had been clobbered by confusion over mooted Government proposals for a stamp duty “holiday”. He added: “What began as a fall in prices is fast becoming a housing crash.”

Lib Dem spokesman Vince Cable said 300,000 householders were already in negative equity — a number that could quadruple over the next year.

Meanwhile the CBI’s Distributive Trades Survey — a key High Street barometer — pointed to a collapse in consumer spending.

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Sixty per cent of respondents said sales in the first half of August were lower than a year ago, with a mere 13 per cent reporting higher sales.

The CBI said the difference between the two figures was the biggest since it began collecting them in April 1983.

Ian McCafferty, the CBI’s chief economic adviser, said: “Retail conditions have been extremely tough this summer and the wet August has been a further blow.

“Sadly, no let-up is expected as we head into early autumn.

“The outlook is particularly weak and retailers are having to scale back their employment and investment plans in an attempt to ride out the storm.”

ian.king@the-sun.co.uk