House slump beats wages

Gordon Brown made big mistakes which caused house prices to boom between 1997 and 2007.Firstly he shouldn't have handed control of interest rates to the Bank of England.Secondly he let how we measure inflation be changed to exclude housing costs.He was able to boast we had a low rate of inflation when we didn't,and interest rates were consequently kept low.Far too much cheap money was borrowed inflated house prices even more.Had interest rates been increased to reflect housing costs,many would have been put off borrowing such huge sums.Another fine mess you've gotten us into Mr Brown.

By Mike.. Posted July 5 2009 at 8:07 AM.

baby you have seen nothing yet....propertysnake is your friend it gives you all the houseprice reductions also use propertybee and see some of the tricks the crass estate agents get up to ...-50% when this is finished....the biggest boom in history is not going to be followed by the smallest bust...

By geoff.k.. Posted February 2 2009 at 2:01 PM.

Am I am a financial adviser. I can tell you now, prices have a lot further to fall yet. House prices tripled over the last ten years. Wages grew by just 30%. That means they must fall at least another 30-35% in total to get back to the long term norm. Anyone buying into the property market now will get their fingers burnt!

By Scott.. Posted January 28 2009 at 7:18 PM.

As much as I would love to join in the doom, I am an estate agent and have seen a huge increase in the number of people looking for a home since the start of december. All the figures you see are well behind the times and those of you hoping for another 20-30% drop - keep dreaming. The professional investors are buying back in taking advantage of 8-9% returns. Once you see the rise in the monthly stats it will already be too late and you will be 2-3 months behind the times. Last year was awful but already this year is looking much much better.

By Chris.. Posted January 26 2009 at 3:17 PM.

I love it :-) Hope house prices drop by another 80%!

By Toby.. Posted January 25 2009 at 11:56 PM.

Having to pay for a hip before you can sell at a time when you are going to lose money doesn't help at all, we keep hearing promises that things are going to improve but when.

By christine.. Posted January 25 2009 at 11:44 PM.

It's all relative and just makes the next larger property you buy less expensive so everyone gains.

By Paul.. Posted January 25 2009 at 10:43 PM.

Falling house prices are the only bright spot in these gloomy times.

If people are earning less then they need things to be cheaper.

Shame on this useless government for having allowed things to get so bad.

By Steve A.. Posted January 25 2009 at 4:48 PM.

There has been a 20% fall in house values from the peak in August 2007 according to the Halifax and with the wholesale redundancies flooding along now, it seems inevitable that values will fall by at least as much again this year. Affordable housing is a good, not a bad thing.

By Harry.. Posted January 25 2009 at 12:12 PM.

I keep reading all this price crash news. I can assure you nice places haven't dropped hardly at all. We have put over ten offers at under 20% of asking prices in various Kent locations. None accepted. 6 months and they will be rising again.

By Simon.. Posted January 25 2009 at 12:11 PM.

There has been a 20% fall in house values from the peak in August 2007 according to the Halifax and with the wholesale redundancies flooding along now, it seems inevitable that values will fall by at least as much again this year. Affordable housing is a good, not a bad thing.

By Harry.. Posted January 25 2009 at 12:11 PM.

I bought a house in 2006, i had to remortgage late last year year. The Abbey said there was not enough profit in my house and increased my monthly payments. I also had my overtime hours cut at work and so could no longer afford the mortgage. We are facing reposesion. My wife has moved back in with her parents and taken the kids. I am off from work completely now due to depression.

By Donald.. Posted January 25 2009 at 12:21 PM.

I would imagine that with all the redundancies being announced at the moment that prices will fall by another 20% this year. The lack of affordable housing is a huge social problem and it's good to se the Government finally sorting it out!

By Harry.. Posted January 25 2009 at 12:34 PM.

We sold in November for 15% beneath the peak of 2007, It took 9 months to sell and we consistantly advertised £5000 under every similar property. We were lucky to get out as both were out of work. I was aware several years ago that we were in a bubble mania with housing. Why at that time was there no one in the media making an issue of it? why was it praised as a good thing? House price inflation was never real money for spending unless you were a lucky speculator that got out early. Once again it will lead to ruin of not just individuals but a large part of the economy. Debt always bites back and this time will bite harder than ever due to the sheer size, time and scope of the debt binge. Try 1990s crash x5 at least.

By Steve.. Posted January 25 2009 at 12:06 PM.

This is good news. House prices have been beyond the reach of the average worker for several years. A major fall will mean that most people will be able to buy a house where they want to. And they will no longer have to keep worrying about either affording one or paying the mortgage if they've over-stretched themselves financially.

That high house prices are a good thing is one of the great lies of our times.

By Frank Hovis.. Posted January 25 2009 at 11:59 AM.

This is just the start. Another 15-20% drop in 2009 and then a 10% drop in 2010. At that point houses will be back to the long term average when taken against wages. It equates to a 40% drop from the peak of 2007. Sellers - if you want to sell drop the price significantly and then get a reduction on the property you wish to buy. First Time Buyers - rent until 40% off has happened, that's at least 18-24 months away.

By Scott.. Posted January 25 2009 at 11:07 AM.

House prices had reached such ridiculous levels by the beginning of 2008 that this crash was bound to happen. The brakes should have been put on this crazy housing boom years ago but no action was taken: ordinary people were prepared to take out insanely large mortgages, the banks were happy to provide them and the government was content to let it all continue, as it gave the illusion that everybody was getting richer.

Now reality is hitting home and it's going to be bad. We're all to blame for this mess; the banks, the government AND the general public!

By Daniel.. Posted January 25 2009 at 11:15 AM.

I'd love to earn the average wage of £479 a week thats more than me and my girlfriend get together, i think the average is more like £250 a week

By Richard williams.. Posted January 25 2009 at 11:12 AM.

Where are house prices dropping like that? I have seen no evidence of it where I live. House prices are the same as 2 years ago and still selling. Solihull, West Midlands. So where are they dropping by around £700 per week?

By A WOOD.. Posted January 25 2009 at 10:45 AM.

There is still worse to come for house prices. Whilst to people who have been in their homes a long time it may not matter unless they want to downsize, it will be more worrying for recent first time buyers and those with investment properties or second homes.

I don't think we'll see price start to rise again for another 6 years and by then homes will be less than half their price in 2007.

By Mike Livingstone (Reigate Surrey).. Posted January 25 2009 at 10:29 AM.

And yet the HIPs are still in existence! It's all a sick joke in this country.

By Vicki .. Posted January 25 2009 at 8:05 AM.