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British house prices fall

Ireland not alone in collapsing property market

The Times reports that house prices in Britain are likely to fall by seven per cent in the next year alongside a 40 per cent fall in sales.

Interestingly, Britain is currently suffering from an acute housing shortage with

an estimated five million new homes required in the coming decade.

Yesterday, Oliver Bennett, writing in the Sunday Times, asked if Britain's love affair with property was over. 

The consensus has it that the housing boom is over. Most areas in England have registered price falls, with homes in Greater London the steepest of all. Halifax, which does a monthly survey of house prices, says that values fell across the UK by 2.5% in March; the housing analyst Hometrack reckons that values were down by 0.9% in April, the seventh consecutive month of falls. Recently, in a reversal of the situation a few years ago, it was reported that UK properties were losing £45 a day. “When everything’s going up, there’s a feelgood factor and people tell each other how much their houses are going up at dinner parties,” says Professor Mark Stephens of York University’s Centre for Housing Policy. “Then the music stops, as it always does."

One thing that rankles slightly is the notion that Britain had a housing boom at all – it didn't. A house price boom, certainly, but not a housing boom by any stretch of the imagination.

In fact, the great British property orgy was predicated on artificial scarcity: only 169,000 houses were completed in 2002, compared wit 400,000 in the actual boom years of the 1960s.

Britain's housing market is dominated by transactions involving existing, not new homes.


Last modified on Monday, 19 May 2008 12:39