House price falls gather pace

The following is the latest report from the Press Association, linked here. It begins:

House prices dived by 2.7% during August, figures showed.

The average cost of a home dropped to £211,410 during the month, driven down by a 5.1% fall in the value of flats and a 3% slide in the cost of terrace houses, according to Communities and Local Government.

Meantime Sky News has its own report, linked here. The broadcaster has the fall in prices estimated as much as 40 per cent. If anything like this reduction is indeed being experienced then mortgage lenders will be about to experience a huge fall in mortgage payments as this blog has now been warning for almost a month. There is certain to be a critical level of price falls where the average family either through general price inflation, unemployment or sheer inability to cope will deem it unrealistic to continue payments against a mortgage on a property upon which they are never again likely to enjoy any equity. The squeeze as so far experienced by lenders will seem as nothing if a real house price drop of 40 per cent is ever experienced. Mortgage repayments will fall to a trickle! This blogger berated David Cameron for suggesting a holiday on the 75th birthday obligation to purchase pension annuities would be an idea worth considering, as if there was any short term prospect for a 75 year old to ever see an improvement in the country's economic dire straits. Yesterday we had the Government dreaming that the nationalised banks could quickly return to the lending levels of the past two years for mortgages - like targeting water to flow uphill and supreme market ignorance opined an expert before the Commons Treasury Committee today - precisely, none in the Government nor the Opposition seem to have the first clue of the depths of the economic hole they have all created. Mass misery for millions is now on the menu, the plight of a few wealthy bankers is as nothing to the desperate need for massive sums of aid now required for the ordinary house-buying citizen.