House prices won’t crash
HOME owners received a double dose of good news yesterday as experts dismissed predictions of a property crash – and Britain’s biggest mortgage lender cut its rates.
Despite doom-mongers’ gloomy forecasts, house prices remain up on last year with annual growth at 1.7 per cent last month. [>
[>
The figure comes as Halifax announced it is to cut some mortgage rates by between 0.10 and 0.20 percentage points for existing customers, potentially saving them hundreds of pounds a year. [>
[>
John Wriglesworth, housing economist at Wriglesworth Consultancy, said: “There is no sign of a property crash and never has been. Predic-tions otherwise have been grossly exaggerated. What we have seen is a small correction from a massive peak and there is very little chance of falling into an abyss. [>
[>
“What we need is for lenders to loosen the purse strings and that’s why the news from the Halifax is welcome.” [>
[>
Halifax’s decision to slash rates on its three- and five-year fixed and tracker deals means customers looking to remortgage will now pay up to £200 a year less on an average £100,000 mortgage. [>
[>
The cuts follow the lead of the Nationwide Building Society and Abbey, which reduced rates last week. [>
[>
In further good news, the latest house price index – based on information from five major UK house value surveys – showed annual growth remained steady at 1.7 per cent last month. [>
[>
Although, down from 3.6 per cent in March, the figure shows that house prices are still up on last April. [>
[>
The typical house in the UK is now valued at £211,014, down from a high of £215,089 six months ago. But annually, the typical home owner would have seen the price of their home rise by £2,279 since April 2007. [>
[>
Stuart Law, of Assetz House Price Index which carried out the research, said: “I am yet to see any firm evidence of a housing market crash. Values in this country have remained extremely robust in spite of the difficulties in the mortgage market. [>
[>
“With announcements from some mortgage lenders that they are now reducing their rates, movement should return to the market and we should return to a degree of normality, perhaps as soon as September.” [>
[>
Peter Bolton King, chief executive of the National Association of Estate Agents, also predicted an upturn in the market in the second half of the year. [>
[>
He said: “There is no housing crisis, we have no credit crisis. If anything, we have only a crisis of confidence in the market. [>
[>
“We just need a couple of good deals offered by lenders and people will start to borrow and buy again.” [>
