The November 2004 housing data for the UK is starting to trickle in, and it looks like the housing bust is in full swing.
House prices fell further in November and property sale times lengthened as rate rises took their toll, the Royal Institute of Chartered Surveyors found.Yesterday the UK property website Rightmove announced that its Housing Price Index -- as they say, "the largest, most accurate and up-to-date monthly sample of residential property asking prices" -- changed -0.3% in December. This marks the second monthly decline in a row in asking prices, which overall are -3.3% since July 2004. The average mortgage payment in the UK, probably the most important figure for measuring the effects of price rises cutting into overall consumption, is now �655/mo., down 2% from its high in October but still up a whopping 34% from this time last year.
A total of 48% of chartered surveyor estate agents reported lower prices in the three months to November - the highest level in 12 years.
Meanwhile the number of sales dropped 32% to an average of 22 per surveyor.
The amount of unsold properties on their books rose for the sixth month in a row to an average of 67 properties.
London prices were down even more than the rest of the country. At -0.4% for December, London housing prices have fallen three of the last four months are are a stunning -5.8% since their July 2004 high.
Note finally that Rightmove's index is based on asking prices, not selling prices. If the market is softening up as much as the overall trend suggests, these prices may be even lower when Halifax and Nationwide report their data based on actual mortgage approvals. According to the Halifax data, the slide in London prices in 2004 so far is steeper than the slide in 1989 when the last big London housing bubble popped. Back then it took nine long years for prices to recover.
As I've said many times before, a preview of coming US attractions.