House prices suffer biggest drop since 2009 - Nationwide -2.6%

homelessskilledworker

LONDON (Reuters)- British house prices fell at their fastest annual pace in nearly three years last month, data from mortgage lender Nationwide showed on Wednesday, as the effects of nine months of recession spread further across the economy.
Nationwide reported a 0.7 percent decline in house prices in July, a much bigger drop than that forecast by any economist polled by Reuters. Prices are now 2.6 percent lower than a year ago - their biggest annual fall since August 2009.

RenovationMan

Good news for those wanting lower house prices, but I'm still not convinced that it's worth holding on with annual drops of only 2.6 percent. Especially given that someone who had bought a year ago on a repayment mortgage would have reduced their mortgage by 4% by now

Wookster

RenovationMan wrote: »

Especially given that someone who had bought a year ago on a repayment mortgage would have reduced their mortgage by 4% by now

How do you get to 4%?

abaxas

Wookster wrote: »

How do you get to 4%?

6 sided dice.

Graham_Devon

Good.

........

joe_blotts

PasturesNew

I am looking for a house... trouble is I've got inflated expectations... and the smallest ones just a bit further away than what I wanted are still 50% more than the money I have....

Where's the 70% club? We need a dance to help me out.

Generali

Wookster wrote: »

How do you get to 4%?

Not checking how the capital repayments work on a 25 year mortgage perhaps...?

Generali

I wonder, mostly because I'm too lazy to do the sums, whether increasing nominal falls represent inflation falling. I.e. real price falls are about constant. Alternatively it could just be monthly noise or perhaps the start of another crash. Time will tell.

At least one of you must have won 'Generali Catchphrase Bingo' from that lot!

Wookster

Generali wrote: »

Not checking how the capital repayments work on a 25 year mortgage perhaps...?

I think he did 1/25 years = 4% which, of course, is not correct.

RenovationMan

Generali wrote: »

Not checking how the capital repayments work on a 25 year mortgage perhaps...?

I know that the interest is loaded up front on a repayment mortgage and that the majority of the capital repayment is on the back end. However, averaged out over the lifetime of a 25 year mortgage, the repayment portion is 1/25th or 4%.

Everyone who buys a house with a mortgage will be subject to this front loading, so the point is that someone who bought 12 months ago will obviously be 1 year further down the road. As many people on ere have been waiting 5 or more eyars to buy, then they are even furtherbehind the curve - which is fine if there are significant drops that justify the wait.

The point of my post is that I personally don't feel that the drops over the last few years were worth the wait for many people.