‘Monster’ one month fall in house prices

What a monster of a figure. A 3.6 per cent fall in house prices in one month. That is off the scale. I was not aware that such a fall was even feasible. It has never happened before in the entire history of the landmark Halifax House Price Index, since it started in 1983.

The sharp correction in 2008 saw the monthly falls trough at 2.6 per cent, so September 2010 saw absolute carnage in the housing market.

Now it is true to say that monthly house price figures do bounce around. The quarterly number, the underlying trend is now down 0.9 per cent.

Martin Ellis, Halifax’s housing economist pointed to softening consumer confidence.

“An increase in the number of properties available for sale in recent months has reduced the imbalance. At the same time, renewed uncertainty about the economy and jobs has caused consumer confidence to falter recently, dampening the demand for home purchase,” he said.

As I said in August, the Austerity talk clearly has spooked Britain. But this could well be the beginning of something much bigger. A fundamental correction, that was put on hold by the bank rescues.