UK House Prices Continue Falling

According to the Nationwide, house prices in the UK continued falling in October. Property prices fell by 1.4% this month, increasing the annual rate of decline from 12.4% to 14.6%.

The Building Society stated that the price falls were being driven by the drop in sales, currently at their lowest for 34 years. The price of an average house is now £158,900 - nearly £30,000 less than a year ago.

Recent figures from the Bank of England show that mortgages approved, but not yet lent, were down by two-thirds on the levels of a year ago.

The credit crunch continues

Unfortunately, the crisis in the banking system is showing little sign of improvement, despite the dramatic interventions of central banks and governments around the globe. Banks are still restricting their new mortgage lending, a trend which is likely to continue in the next few months.

On a more optimistic note, interest rates are likely to continue to be cut sharply, as recession bites.