House prices have fallen by more than 15 per cent since their peak in August last year, according to Halifax, and some experts say they could fall by a total of 35 per cent. According to recent figures that activity in the housing market, which plunged to record lows since last August, has picked up slightly as investors snap up bargain properties.

But there are fears that first-time buyers — crucial to the health of the housing market — will not be able to take advantage of falling prices because mortgage lenders are refusing to grant home loans to those without a substantial deposit.

After the Bank of England’s rate-setting Monetary Policy Committee slashed interest rates by 1.5 per cent to 3 per cent earlier this month, the sharp decline in the UK housing market has slowed down. Nationwide, the Britain’s biggest building society shows in its figures that the decline in annual house prices is fallen to 13.9 per cent this month from 14.6 per cent (from their peak) in October. This fall is the smallest decline since November.

According to Fionnula Earley, Nationwide’s chief economist, the Monetary Policy Committee's decision to reduce interest rates meeting has taken most commentators by surprise. Ms. Earley also comments, “While not aimed directly at the housing market, such a substantial shift in the bank rate will help a significant number of existing and potential homebuyers.”

However, the price of an average house is still £25,000 below this time last year, at £158,442.

Date : 2008-11-29 03:14:55
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