Thrifty Loans

Estate agents around the country are sitting with property on their books that they can’t sell. Asking prices are cut by as much as 20% in a bid to shift the property.

The impact of rising interest rates, rising mortgage rates, Home Information Packs and a drop in consumer confidence following the credit crisis and Northern Rock’s problems are finally having a detrimental effect on house prices, and they could be set to tumble fast in some areas.

Ocean estate agency in Bristol reported having 240 properties for sale on their books where this time 12 months ago they had 80. A house that might have sold for £290,000 recently will now be put on offer for a mere £250,000.

Estate agent Hammond Harwood of Nottingham said that the market was “dead”. They have properties on their books which have been there for months and months, having suffered several price reductions, but still won’t sell.

Dacre, Son & Hartley reported that the market in Leeds and Yorkshire was becoming very, very hard. Sellers are reluctant to cut their asking price, but even when they do, they’re not selling.

Further south, in Devon, Fulfords estate agency said that properties were selling at 12% below asking prices, as the problem spreads around the country.

Both Halifax and Nationwide – two of Britain’s biggest mortgage lenders – reported last week that the housing market was showing distinct signs of cooling. Nevertheless, prices are still around 10% higher than a year ago. Halifax said that prices fell by 0.6% in September, but Nationwide said that were up by 0.7% on the previous month, although Nationwide still said the market was slowing down.

As the market cools, there is still the threat of higher mortgages to come. Despite the Bank of England keeping base rates at 5.75% last week, the credit squeeze has pushed the cost of borrowing money up for banks, and they are having to put mortgage rates up to fund the money