Thursday, 29th May 2008

Not the headline the government wants right now

James Forsyth 10:56am

This is the story leading The Guardian web site:

House prices: Nationwide reports fastest fall since 1991

Nationwide are reporting that house prices fell 2.5 percent month on month and the price of the average home has dropped 4.4 percent compared to last year. (To put that in perspective though, the average house price is still 10 higher percent than they were in 2005).

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Rex Burr

May 29th, 2008 5:05pm Report this comment

I have owned my house outright for 20 years. It won't affect me if it's value falls. I am grown up enough not to be affected by a notional wealth factor.
I am hoping for a 30% fall in house prices to help future generations and the economy.
Families paying ridiculous sums for their house cannot engage with the rest of the economy or save for their retirement.
Current prices represent a massive transfer of wealth from the young poor to the elder rich and it is happening under a labour(?) government.

Chris

May 29th, 2008 6:11pm Report this comment

>To put that in perspective though, the average house price is still 10 higher percent than they were in 2005.

Oh. Are it really?

Paul B

May 29th, 2008 8:28pm Report this comment

I e still have a mortgage, and "own" approx 70pc of my house. Falling value will mean the percentage of the house I own, will decrease, but quite frankly I am not worried. I believe to some extent falling hose prices will benefit the economy, mobility will become easier, first time purchases will be less fraught for the young (I have 3 children, two in their mid teens). I further believe in markets, which go up & down,hey ho, whats new.

I do though recognise that for some who borrowed 100pc & more of the value of their homes in last couple of years it will get tough, especially if they need to sell, but its always risk people take. A home is a home and it some ways should be viewed in the same way as motor vehicle purchase, ie you buy it for the product, not necessarily as a financial instrument.

Labours problem is that by massaging the inflation rate, by not using RPI and not including house price inflation in the official figures (& council tax I believe and other less sympathetic items, please correct if I am wrong) the claimed inflation rate for a number of years has been false and as a consequence the monetary committee have kept interest rates too low. As the great lady said, there are no free lunches in this world, and now the price is being paid, financially by some poor unfortunates and electorally by Brown & Labour.

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