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Record breaking UK house price falls...

By
Services for Real Estate Pros with Globrix

…are themselves beginning to sound like a broken record. Everything has to be on a biblical scale when we talk about house prices and today is no different, year-on-year British house prices have fallen by 8.1% according to Nationwide. And, you guessed it, that’s the biggest annual drop since records began in 1991. This is the top story in most of our papers today, as you can probably imagine. Soon we'll be lining up the animals two by two and jumping in the ark to sail to safety.

House prices have been hugely overinflated in this country for a very long time, I know I say it often but even during this 'house price crash' it would cost you over half a million dollars to buy my (fairly crappy and tiny) one bed apartment in East London. I think this 'crash' is more of a 'correction', a reality check to those who have grown to think it's normal for small houses in nice areas to be worth the equivalent to a million+ dollars.

But, all that being said, news is news and today we've learned that the average British home has lost almost £15,000 (or 30,000 dollars) in value since July 2007 and the number of first time buyers has fallen by 41%. It's a difficult time for first time buyers, they've waited so long for the chance to buy a property, the prices come down and *BHAM* nobody will give them a mortgage. The average age of a first time buyer here is 34, I'd be interested to know how that compares to the US.

Anyway, a picure tells a thousand words so here's what's happening on the other side of the pond...

 

I don't think anyone will be framing this pic and hanging it over the mantle any time soon!

Fernando Herboso - Associate Broker MD, & VA
Maxus Realty Group of Samson Properties - Clarksburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

UK . . guilty by association. . this is a global recession

Jul 30, 2008 11:49 PM
Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

Interesting post. All my in-laws live in the Uk and they confirm that the market is soft

Jul 31, 2008 12:14 AM
Clint Miller
Real Estate Pipeline, Inc. - Missoula, MT

I still have a hard time believing that the government of this country calls this "a time of slow economic growth"..... Call it what it is....its a recession.  Heck, in some places, its a depression!

Jul 31, 2008 12:33 AM
C Tann-Starr
Tann Starr & Associates, Inc. - Palm Bay, FL

Poppy, that chart is a whopper of a visual. A picture is definitely worth a thousand words. People are really struggling now and it seems to be getting worse before it gets better. I have another seller who wants to take her house off the market and rent to Section 8 because buyers are serial looking and appear to still be  speculating about unrealistic bargains rather than considering what it is that they really need. I've been facing a lot of "something for nothing" attitudes lately. It's a very tough market, indeed.

Jul 31, 2008 12:59 AM
Norma Toering Broker for Palos Verdes and Beach Cities
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes Luxury Homes in L.A.

That's a steep slide, and there's no thrill in riding it down--but there will be a bottom.  Then the cycle will begin all over again.

Jul 31, 2008 04:00 AM
Peter Nikic
Broad & Bailey Realty LLC - Valhalla, NY

Poppy, that looks like a 20% drop over the past year (from looking at the chart). unfortunately, we have similar circumstances here with respect to first time buyers.

btw, the person who sold at the top of that chart and is now buying (at the bottom), will want to hang it on their wall:-)

Jul 31, 2008 07:14 AM
Alison Scott
eXp Realty, LLC - Suwanee, GA
Residential real estate sales

We are looking at the same kind of numbers here in Atlanta. The average drop for a price range of say $250k is around 20-30k. Buyer's are having a heck of a time getting loans, and deals are not closing.

I am from the south of England and have always been shocked at London and the home county housing prices. I guess the question we are all asking is how long is this going to take to turn around? My Dad, who lives in the UK says the papers are saying years for the UK market. Trouble is they do love spreading doom and gloom around, a huge part of our problem in the USA was the negative press on the housing market that was going on for a couple of years before the proverbial hit the fan... I am seeing a little more positive reporting now on the future, so we keep praying the worst is over.....after all what have we got left if not optimism?

Aug 01, 2008 03:14 AM
Chuck Willman
Chuck Willman - Alpine, UT
NewHouseUtah.com

Yes. The rock off the cliff graph. I've created a few of those depressing pictures lately. I'm hoping to twist that to landcape mode then 180 degrees at some point.

Aug 22, 2008 06:07 PM
Jane Page Thompson
Aiken Properties - Aiken, SC

... And now the pound is at a 2 year low to the dollar and I've been spending money on ads in England- Go figure!

Aug 25, 2008 02:16 PM
Barbara Kehl
Barbara Kehl Realty - Yuma, AZ
Yuma Arizona Real Estate

Poppy, I absolutely agree that the "crash" is more of a "correction".  Thank you for sharing.

Nyana - Office Manager, Barbara Kehl Realty

Sep 04, 2008 06:27 AM