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Chestertons report significant house price fall

Written by Gary Howes

Monday, 08 September 2008

Prices 3.4% lower than August 2007 but reports of fresh interest grow.

The credit crunch continues to plague the housing market and its effects are being felt throughout the UK.

The Chesterton House Price Poll of Polls (PoP) for August reveals that house prices last month were 3.4% lower than a year ago.

The report, compiled by the Centre for Economics and Business Research (CEBR), revealed that house prices fell in all regions in August, with the average price of a residential property in England and Wales falling to £188,431, a 1.1% fall from July.

One year ago, the average house price was £195,192.

All property types suffered in August with terraced houses the worst off, experiencing a 0.7% drop in month-on-month prices. London house prices are now 0.9% lower than in August 2007.

Douglas McWilliams, Chief Executive of CEBR, comments:

“The credit crunch is now having a profound effect on the housing market, causing the August house price Poll of Polls to show the largest year on year fall since the survey began.

Stamp duty

"While the Treasury’s announcement of a break in stamp duty may provide a small fillip to properties outside of London and the South East in the short term, until banks start lending again, house prices are likely to continue their downward descent. The latest Bank of England data shows only 33,000 mortgage approvals went through in August, which is 71% lower than the number of loans approved in August 2007,” says McWilliams.

Robert Bartlett, CEO of Chesterton says, “the announcement of the £175,000 stamp duty holiday may bring some hope to the lower end of the market but the market needs more support, particularly in London where there are very few properties available under £175,000. Sadly, the Government’s recent announcement will have little positive effect.”

Bartlett points to the establishment of property clubs - the banding together of private buyers to buy properties - as an example of renewed interest in the market.