House prices falling...

"House prices could slump by another 55 per cent, a respected City forecaster warns. It also predicts a deep recession lasting throughout next year and a 'very real probability' that Britain will go bankrupt. The report leaked yesterday from financial analysts Numis Securities says that the collapse in house prices is not 'anywhere near over'.

They have already fallen 21 per cent from their peak, but the report says they will slump further by up to 55 per cent if the over-correction in prices is as bad as in the early 1990s.
That would leave 6million Britons in negative equity - when their house is worth less than their mortgage. "


So what?

If you're selling your house then the one you are buying has also gone down in price. If you trade UP the house price fall is even greater.

If you borrow money the interest payments are less than ever.

If you already have a mortgage then repayments have fallen (unless your mortgage is fixed).

So, unless you are emigrating (and the recession is worldwide anyway) what's the problem with falling house prices?

There isn't one!

...or is there a mistake in the above analysis?


  1. When the price is falling,you may not sold out the house with a price you expected to have at least. Therefore,it ended up a loss in the trade. The interest is low indeed, but there is still interest you need to pay.How it is going to repay the mortgage with a loss and interest.

  2. Yes you`re right, I do think house price will increase...but some experts predicted that Uk economy may recover in 2010.It`s doubt that house price will fall by 55 per cent

  3. Well the problem is cosumer confidence. If the house price are falling, forget about the wealth effect and people going out and contributing to the economic recovery by spending and buying goods.