The latest data from the Halifax shows a 2.4 percent drop in house prices for May 2008, making them 3.8 percent lower than they were in May 2007.
A house builder commenting on the state of the housing market right now felt it was quite depressed, with sales numbers well down compared to what was expected. They are forecasting sales down by around 15 percent compared with last year and when combined with lower prices as well the state of the new house market is precarious. The Halifax figures have been confirming this situation for the last few months so it has not come as a surprise to anyone.
What is making the property market harder to work in is the limited availability of home loan funds. The Halifax mortgage providers, as well as those of other financial organisations, are being more wary of who they lend money to. Larger deposits are required now as well as a whiter than white credit history, making it much more difficult for buyers to source the funding they need.
New mortgage customers at the Halifax will have to pay a little more for their home loans from today if they are taking out a tracker or fixed rate mortgage product.
The Halifax tracker mortgage rate goes up to 6.29 percent from 5.99, which is 1.29 percent above the base rate set by the Bank of England. Meanwhile the three year fixed rate mortgage offer rises to 6.44 percent, up from 6.22. A Halifax spokesman clarified that the increases will apply to just 5 of the 32 different tracker mortgages they offer and 19 of the 31 different fixed rate mortgages provided.
In that context then there are still many opportunities to avoid paying the extra interest, though of course the Halifax mortgage products that have been selected are the ones that will be the most popular.
The Nationwide Building Society housing data for April reveals that house prices fell by just over one percent during April, taking them to a lower price point than the same time last year.
This latest house price fall takes the market to a position where, for the first time in ten years, there has been a year on year decrease. A Nationwide Building Society spokesman thought that the falling price of property showed how lack of affordability and more difficult access to mortgages was really pressing the market.
They also went on to say that, with the market falling as it has been doing it may prompt further base rate cuts by the Bank of England. The Nationwide Building Society figures show a steep fall in property transactions over the last six months or so and this latest data suggests something really needs to be done to stimulate activity once more.
