House prices fall at fastest rate since '91
House prices fell 1.7 percent on the month in July and at the fastest annual rate since at least 1991, the Nationwide building society said on Thursday, in a further sign the housing market is cooling fast.
Posted: Thursday, July 31, 2008, 8:44 (BST)
House prices fell 1.7 percent on the month in July and at the fastest annual rate since at least 1991, the Nationwide building society said on Thursday, in a further sign the housing market is cooling fast.
The figures came hours after a survey showed consumer confidence fell to a record low this month, highlighting the uphill struggle facing Prime Minister Gordon Brown if he is to regain public support before the next election.
The GFK NOP consumer confidence index fell five points to -39 in July, the lowest reading since the survey began in 1974.
Nationwide said the average house price fell for a ninth straight month in July to 169,316 pounds - 9 percent below the peak hit in October last year of 186,044 pounds and the lowest level since August 2006.
House prices were down 8.1 percent compared to the same month a year ago - the biggest annual fall since the monthly series began in January 1991.
"The combination of weaker consumer confidence and sharply slowing house prices will take its toll on consumer spending and the broader economy throughout the remainder of this year," said George Buckley, chief UK economist at Deutsche Bank.
RATE FOCUS
The weaker-than-expected figures are likely to fuel speculation that the next move in official interest rates will be down.
However, Bank of England policymakers have indicated they are in no hurry to cut rates when inflation is running at its highest level in more than a decade - 3.8 percent.
Gas and electricity suppliers are also starting to ramp up prices, which could drive inflation even further above the central bank's 2 percent target.
Britain's biggest supplier and British Gas-owner Centrica said on Wednesday it would hike gas prices by 35 percent and rival EDF last week said it was raising prices for gas and electricity by about a fifth.
Alongside concerns about sharp price increases, recent news on the economy has been almost unequivocally bleak.
Mortgage approvals, which provide an insight into future moves in house prices, fell sharply to a fresh series low in June, Bank data showed this week.
Retail spending is weakening sharply, unemployment is rising and some broader surveys are already indicating the economy is in contraction.
"With poor economic news, the sentiment around interest rates has become much less hawkish," said Fionnuala Earley, Nationwide's chief economist.
"Only a month ago the market was expecting the Monetary Policy Committee to increase the Bank Rate twice this year: they now expect no change."
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Added: Saturday, September 20, 2008, 15:33 (BST)
It is about time a UK Christian news provider has mentioned anything to do with the recent credit crunch and its long-term effects. Do Christians feel that they have a God-given right to be unaffected by negative equity, unemployment or loss of savings, because God promised to action plans to help us to succeed? He did so, but the promise came with provisos that we keep His laws and ordinances, and I feel that the Church has done little to not enough in this regard - and I include myself in that!
We need to get back to knowing who we really are in Christ, and soon. Of the things that have been happening lately, when viewed through the lens of God's Word, Joel Rosenberg's 'Third Lens', we can begin to see that Biblical prophecies are starting, more than ever, to take shape, and these are the signs that Jesus was telling us to watch for. Just because it's been happening over the last eight years, or so, does not remove the fact that God is both shaking the nations and His Church.
It's easy to be all judgmental-sounding, and quasi-prophetic, saying 'I told you so!', but even the Biblical prophets were not immune to the effects of God's judgments on Israel, after telling them, and it shows that we are ALL in the same boat, in whatever country we're in. Whatever happens in India, China, the US or in mainland Europe affects us in the UK, and we should not be ignorant of that. God may be, and is, in control, but we have to play our part, in that we need to start to get beyond our regional, parochial squabbling and return to God's Word, to realign ourselves to Him and renew our hearts by His Spirit and the Blood of Christ. And this is BEYOND denominational issues.
God will sort His house out first, then the nations second, but how He does it will be up to Him. Jesus' exhortation to His disciples' question about the Last Days were to watch and pray. This is what we should be doing, together, despite everything else.
Chris Maguire, Ventnor, IOW, UK
