Halifax piles on woe
The drip feed of bad news for the property market continued yesterday when Britain’s biggest lender Halifax revealed that house prices have fallen back to mid-2006 levels.
House prices are now 8.8 per cent lower than they were this time last year, Halifax said, with an average home in Britain costing £21,733 less than July 2007.
The pace of decline in values is now steeper than the housing crash in the early 1990s, when thousands of homeowners fell into negative equity, meaning the value of a house is worth less than the mortgage taken out on it.
And Chancellor Alistair Darling risked plunging the battered housing market into even deeper trouble yesterday over uncertainty surrounding the suspension of stamp duty.
He came under pressure to clarify his position after estate agents, industry experts and the opposition warned that potential buyers could paralyse the market by holding off purchasing a home until any announcement is made.
In a letter to the Chancellor, shadow chief secretary to the Treasury Philip Hammond said: “Your decision to float a stamp duty suspension, without confirming it one way or the other, has now created a significant incentive for people to delay the purchase of a property in the hope of avoiding the payment of stamp duty on the transaction.”
Halifax said that prices plunged 1.7 per cent in July and for the sixth month running. RICS chief economist Simon Rubinsohn said this demonstrated the “severe pressure” on the property market.