House price fall takes UK to the brink
Economy on the verge of crisis as house prices fall at their sharpest rate for 18 years
Fresh evidence that Britain’s economy is on the brink of crisis continues to emerge after August house prices fell at their sharpest annual rate in 18 years and retail sales slumped.
House prices fell 1.9 per cent during August, resulting in a 10.5 per cent year-on-year fall, according to the Nationwide Building Society.
It’s the first time in the survey’s history that an annual fall has reached double digits and comes as deteriorating market conditions resulted in property consultancy Savills posting a 41 per cent drop in first-half pre-tax profits yesterday.
However, the Nationwide survey offers a glimmer of hope. Estate agents reported a slight improvement in the number of new buyer enquiries, as bargain hunters used the recent falls as an opportunity to negotiate a good deal.
Meanwhile, the GfK/NOP consumer confidence barometer, published today, shows a small improvement, rising three points to minus 36, but still 32 points lower than August last year. Consumers were also more confident about outlook for the year ahead, it found.
The news will bring some relief to the High Street after the CBI said retailers were being hit more badly than in the 1990s recession.
Meanwhile, better-than-expected economic growth in America has given flagging markets a boost. The US Commerce Department said the economy grew at 3.3 per cent in the second quarter, which is much higher than its original estimate of just 1.9 per cent.