Fears of a House Price Slump Deepen
A report released yesterday warns that falling house prices could escalate into a crash if the mortgage crisis is not halted.
Traditionally, April is one of the best months to sell your home and prices usually surge. But the property website Rightmove says that this April they are falling, on an annual basis, for the first time since it started its survey in 2002.
Record numbers of homes are being put on the market, and failing to find a buyer, according to the report. Those who do find a buyer have had to wait for longer than before.
It says mortgage meltdown could cripple the property market if the Bank of England's £50bn emergency rescue plan does not work.
The Bank hopes its move will help end the credit crunch, which has forced banks and building societies to axe cheap mortgage deals in record numbers.
Miles Shipside, commercial director of Rightmove, said: 'An ongoing lack of mortgage funds could trigger a price crash if an increasing number of sellers are forced to seek rarer mortgage-free cash buyers or those with large deposits. 'As well as being thinner on the ground, these buyers will be able to demand larger discounts.'
Mr Shipside said the housing market was undergoing 'a reasonable correction' after an extraordinary boom which lasted more than a decade. But it was 'in danger of being taken to unreasonable extremes' if the mortgage market does not return to normal. Across the country, asking prices fell by 0.1% between March 16 and April 12. In previous Aprils Rightmove has seen an average price rise of 2.8%.
April is seen as a prime time to sell because the trees are in blossom and the weather is improving. The problem is most severe in London, with asking prices falling up to £3,000 in a month in the exclusive borough of Kensington and Chelsea.
Overall, the Rightmove figures show the average asking price is now £239,521, only just above the level that it was last April. In two regions - the North-West and Yorkshire & Humberside - asking prices have fallen over the last year. The average asking price of a home in the North-West has dropped to £176,431 - down £7,681, or 4.2%.
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