View more on these topics

Property plunge is gathering pace

House prices fell by 2.5 per cent in May, the biggest monthly fall in the history of Nationwide Building Society’s house price survey.

Prices have fallen by 4.4 per cent since this time last year, the biggest annual fall in house prices since December 1992 when prices were falling at an annual rate of 6.3 per cent.

But Nationwide points out that prices are still 5 per cent higher than two years ago and 10 per cent higher than three years ago.

Chief economist Fionnuala Earley says: “The pace of house price falls accelerated in May as more weak economic news added to the gathering momentum of negative sentiment about the housing market.”

Seven months of PRICE fallsShe points out that falling house prices combined with higher inflation makes the Bank of England’s monetary policy committee’s decision more difficult.

Liberal Democrat Shadow Chancellor Vince Cable says: “This freefall in house prices is becoming worry-ingly reminiscent of the Tory recession of the 1990s. The housing market has been seriously overvalued for some time, thanks to massive consumer debt.

“Even the Government now admits that we will see a large correction over the next one or two years.”

The Royal Institution of Chartered Surveyors senior economist David Stubbs says: “The difficulties in the mortgage market are stretching accessibility and threaten to reduce transaction levels by 40 per cent this year.

“With buyers unable to secure financing on reasonable terms, some sellers are now choosing to cut prices. The market will only stabilise once transaction volumes recover.

“The Government and the Bank of England should continue to implement measures to restore the smooth functioning of the mortgage market before the drop in transactions and prices begins to really hurt the economy.”


Slipping up on oil

The market is in danger of becoming almost as much of a washout as last week’s bank holiday. The week before the bank holiday weekend saw equity markets worldwide suffer their worst fall for a quarter and the more shares had recovered, the more ground they gave back.

Pension switch for LibDems

LibDem Shadow Work and Pensions Secretary Danny Alexander is to leave the role to be chief of staff and chairman of the party’s manifesto-writing committee. Cardiff Central MP Jenny Willott takes over.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm