UK Property Crash Underway?
Property prices in the UK continue to boom according to headline figures released by estate agents and mortgage lenders, but investigate further and you discover a whole new side to the UK property market.
There are so many organisations producing figures on UK house prices that it can be difficult to know which reports are the most accurate. Finding an objective view is not easy, with many estate agents and mortgage companies having a vested interest in "talking up" the UK housing market.
Though the figures released by the likes of the Halifax and Nationwide may differ, there is general agreement that UK house prices have risen on average by between 8% and 11% during the 12 months to the beginning of June 2007.
A positive picture to give all home-owners a warm glow then? Well, not quite - let's look a bit deeper.
The Land Registry for England and Wales produce official figures on the prices that houses have actually been sold for. Their figures differ from those provided by estate agents and building societies. They reflect actual price paid and provide an independent source of comparison.
The Land Registry figures for the last quarter make interesting reading. They show a price increase from April 2006 to April 2007 of 9.1% in the UK. This figure is roughly in line with other surveys.
During the month of April 2007 London house prices saw an average increase of 2.3%. Again, this does not seem surprising - it is the sort of figure that would be expected in this current period of "house price boom".
Let's take a look at figures for some other areas though. In April 2007, Yorkshire and The Humber saw average house prices fall by 1.1%. Price drops were also seen in the North West of England, the South West and the North East.
Prices were static in the West Midlands and barely moved in the East Midlands.
The picture, when analysed at this level, is very different to the headline figures. Although the average nationwide figures continue to show price increases, it's clear that house prices are falling across much of the country.
What we are seeing is that house price rises in London and the South East are disguising the wider national picture. They may even be hiding the beginnings of a UK house price crash.
Filed: 19 June 2007
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