Yet more bad news for homeowners looking to sell up as house prices fall another 2%.
Figures released by the Halifax indicate that house prices fell 2% last month and further than at anytime during the 1990's property collapse.
The fall, which is on top of May's 2.5% and April's 1.5% drop, has prompted The National Association of Estate Agents to repeat its call for the government to scrap stamp duty for first-time buyers. The change in policy may have been helpful eighteen moths ago, but with first-time buyer properties typically priced below the stamp duty threshold of £125,000 such a move is unlikely to encourage new buyers into the housing market.
Rate of Stamp Duty Land Tax for UK Residential Property
up to £125,000.............................0%
£125,001 - £250,000..................1%
£250,001 - £500,000..................3%
£500,001 or more........................4%
Source: H.M. Revenue and Customs (2008)
According to an ICM poll for Gumtree the property website, 60% of adults are considering selling up and renting as mortgage payments become unaffordable. The figures also suggest that far from dashing to climb on the property ladder tenants aged 25 to 44 are looking for safer place to put their hard earned cash.
"Traditionally renting in the UK has been associated with student flatshares, but we've seen an increase in professionals and families looking for good quality rental opportunities, while they invest their money elsewhere. Now is the time to remove the stigma from renting and acknowledge it as a credible option." Says Chee Ho Wan of Gumtree as reported in the Guardian.
Homeowners will be relieved, however, that despite rising inflation, the Bank of England has left base rates at 5% this month, but whether lenders will be able to hold down rates remains to be seen. Despite the UK's house price crash the UK mortgage banks are desperate to fill the hole left by the liquidity crisis with savers cash and may not be able to hold savings and mortgage rates down.
The fear is that with the US and UK financial systems in the mess they're in there is little that the government can do to lift property market. Now is the time to get real about property values and accept that until the bottom rung of the property latter is low enough for first-time buyers to step onto house prices will continue to slide.
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