House prices fall by 2.5%

[fedsron2us]

House prices dived at their fastest rate since the crash in the 1990s during March as the credit crunch continued to take its toll on the market, figures showed.

Britain's biggest mortgage lender Halifax said the average cost of a home dropped by 2.5% during the month - the biggest monthly fall since September 1992 and the second largest drop ever.

Annual house price growth also slowed to its lowest level for 12 years, with property prices rising by just 1.1% during the past 12 months, meaning house prices are now falling in real terms on an annual basis.

http://ukpress.google.com/article/ALeqM5h3JlXuuRlbItQToTVJgYR7rXpwSw

The UK property market is now about to follow its US counterpart into the toilet.

Expect falls of 30% plus in price before this is over.

I am afraid Mr 'No more boom or bust' will probably not be getting a second term as PM.

[muriel_volestrangler]

1. Your 30% is remarkably close to the IMF estimate of overvaluation

A much more serious problem, however, stems from the housing sector. In a study just released by the International Monetary Fund, UK house prices are calculated to be 27% above the rate suggested by underlying fundamentals. Only two countries, Ireland and the Netherlands, have more severely overvalued markets. It is far from clear that recent UK price rises have been triggered by the global leverage bubble - the IMF evidence seems to point in the other direction - but it is clear its collapse threatens to cause a severe ­correction. This, rather than the downturn in the financial sector, is the real threat to the stability of Britain's economy. And the Bank of England needs to address it urgently, starting by cutting the bank rate on Thursday.

http://commentisfree.guardian.co.uk/gavyn_davies/2008/04/the_bubble_over_britain.html