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Squeezed Credit Marked a Realty Price Doom
As a result of the squeezed credit, the realty prices in the UK is declining fast. A recent survey showed a worst decline in this sector in the last 12 years.
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April 11, 2008 (FPRC) -- The average home lost almost £5,000 in its equity value during March this year as house prices tumbled by 2.5%. This fall is the biggest monthly fall since the crash of the early Nineties. The sharp dip in realty prices has arrived as lenders slash their mortgage range and cut back on home loans to the prospective buyers. Major Banks and building societies have found themselves unable to keep pace with demand for home loans in the wake of the tightening credit situation preventing them from obtaining funds on the money markets.
According to the latest Halifax house price report, the realty prices are falling at the fastest monthly rate since September 1992. During 1992, it fell by 3% in a month. The average home is now worth just 1.1% more than a year ago and prices have fallen 1% in the first quarter of the current year. It is not the end of the story. The annual rate of house price inflation has now slipped back from a peak of 11.4% in August 2007 to 4.2% in February 2008.
The UK realty market could see worse to come with the round of belt-tightening by mortgage lenders seen in the past fortnight. Halifax's index recorded the slowest rate of annual growth for 12 years for the UK real estate market.
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