Good news for homeowners as falling prices stall

Sliding in property prices are slowing down, according to the UK’s biggest building society.

Nationwide released figures showing home prices fell by 0.4% in November, compared with 1.3% in October.

The year-on-year fall has also stalled at 13.9% against 14.6% a month earlier. This is the first time property prices have stopped falling since October 2007.

The average home costs £158,442, £25,000 less than a year ago, but £25,000 higher than November 2003.

French estate agents say the UK property slump has crossed the Channel as British buyers have dropped 50% this year.

Britons hold 29% of the 260,000 foreign-owned homes in France, and have a huge influence on sales.

Overall, French property sales fell from 10% to 15% over the first nine months of this year, according to estate agent association Fnaim.

In the UK, mortgage lending is still shrinking. Approved home purchase mortgages was down to 21,584 in October, 52% lower than a year earlier.

Nevertheless, while interest rates are falling, Northern Rock has increased mortgage rates. 

The troubled banks woes are based on arrears on home loans of up to 125% of the value of a property.

These make up a third of the Rock’s mortgage book, but half of the number of mortgages in arrears and three-quarters of repossessions.

Rock bosses told a committee of MPs investigating the banking crisis they wanted to lead the way in helping people avoid losing their homes.

Bradford and Bingley were also in the spotlight before the committee as major buy-to-let lenders with mortgage arrears standing at 3% over the industry average.

Both lenders were quizzed about their controversial lending policies.

Committee chairman John McFall, closing the session, told Bradford and Bingley chairman Richard Pym: “I believe you have inherited a shambolic organisation with a giant headache.”

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Tags: Banking, Loans, Mortgage, Mortgages, Property Prices, UK interest rates