Values have dipped by almost -2% in the last year claims the Halifax, and the downward trend looks set to continue. New buyer affordability, on the other hand, is starting to edge up - finally.
Price falls to continueThe latest Halifax index has seen British house price values slip -1.7% overall in the last year. "This was the fifth successive decline in this measure of the underlying trend and compared with a 0.5% fall in September," says the lender.
There's hope for those wanting to make the property ladder leap: the Halifax price/earnings ratio dipped from 4.42 in October 2011 to 4.22 in October 2012. In real terms, that means house-buying 'affordability' has increased +4.5%, if the Halifax numbers are accurate (which sees this trend constant and continuing - see Halifax chart below, right hand side). So cheaper monthly mortgage payments.
But affordability is still problematic. If you can't afford to buy a property when Bank of England interest rates remain stuck at 0.5% - and lots of people have no hope, given that the average national wage hovers at about the 23k mark - then there's something very odd or unreal about the British property market.
More realism?Gráinne Gilmore, head of UK residential research at Knight Frank, quoted in the Telegraph, is clearly uneasy: "Some five years after the start of the financial crisis, the housing sector in the UK still does not bear the hallmarks of a fully functioning market." Gilmore expects prices to slip a further -1% in the next 12 months.
It's even predicted that average UK house prices won't hit the highs hit of 2007 until 2031, once the effects of inflation are stripped out. So, a bleak prognosis for current home owners. And some encouragement, at last, for would-be home buyers (provided they avoid much of the London and the South East). Bring on the slump. It's about time.