House prices have plummeted 15% over the past twelve months and are now falling at their fastest rate for over 25 years.
The Halifax’s latest house price index shows the Average UK home has lost more than £30,000 in value since peaking in summer 2007.
Average house prices fell to £168,176 last month, down 2.2% since September and a 14.9% fall since October 2007, when the average stood at £197,698.
Prices have fallen £31,436, almost 16%, since the peak of £199,612 in August 2007.
Commenting on the figures, Martin Ellis, chief economist at the Halifax, says: “House prices declined by 2.2% in October. Housing market conditions remain challenging in the face of the significant pressures on householders' incomes and the reduction in the availability of mortgage finance since last summer.
“But housing affordability is improving significantly. The house price to average earnings ratio has fallen below 5.0 for the first time for four and a half years. We expect a further improvement in the ratio over the coming months.”
Prices have now returned to the levels of late 2005, but many commentators expect house prices will continue to fall as the UK enters a recession, with some speculating prices may dive by more than 30% before hitting a floor.
The Bank of England’s expected interest rate cut may do little to cheer those relying on high house prices as the Council of Mortgage Lenders sent out a message that its members are unlikely to pass on base rate cuts to customers.
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