The Financial Blog

Nationwide Building Society say that house prices fell by 2.5 per cent in May and prices are 4.4 per cent lower than this time last year. The good news is that prices are still 5 per cent higher than 2 years ago.

Although we all seem to be living in fear of another recession, as mortgage borrowers, Nationwide say that we are better placed to weather the storm than in the 1990’s and that tighter credit conditions should help the longer term sustainability of the market.

We’ve started seeing the first signs of a recovery with mortgage rates being cut in a attempt to stimulate the housing market, so you could take this as a sign that perhaps we’re moving away from the affects of the credit crunch.

But the problems will come for people who have very little or no equity in their properties, if house prices continue to fall and the equity is eaten away.

This entry was posted on Thursday, May 29th, 2008 at 2:23 pm and is filed under Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.