No need to panic over falling house prices (From Swindon Advertiser)

No need to panic over falling house prices

6:42pm Wednesday 9th April 2008 in

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HOUSE prices may be falling across the country, but Swindon is still bucking the national trend according to those who deal in the town's housing market.

The Halifax reported on Tuesday that nationally house prices fell by 2.5 per cent last month - the biggest monthly decline since September 1992.

Meanwhile, Swindon-based Nationwide reported property prices were just 1.1 per cent higher than this time last year.

In Swindon the average price of a house in the first quarter of 2008 is £194,542 according to the building society.

Local estate agent Richard James said he had more buyers than sellers on his books.

"There may be problems in other parts of the country but we are doing pretty well here in Swindon," he said.

"I appreciate that there has been a tightening of the mortgage market but we have returned to a situation of quality lending.

"But if you buy a house now it's still going to be worth more in five years' time.

"It would help to have one or two points off the bank rate but not to a point where inflation might be a problem."

The Halifax's chief economist, Martin Ellis, said that declines in prices should be viewed in the context of the significant price rises over recent years.

He added that house prices were still being underpinned by sound economic fundamentals including a strong labour market, low interest rates and a shortage of new houses.

"I am surprised that we have seen a fall of quite this extent but of course we have been seeing some falls in previous months so it's not surprising that there's actually been a decline during the month."

The National Association of Estate Agents is calling on the Bank of England to act to stabilise the housing market.

Peter Bolton King, chief executive of the NAEA, said: "The housing market is in a tricky situation, people are losing confidence because they are unable to secure mortgages, especially first time buyers who are being scared off by the feeling of instability.

"There remain strong economic factors in the country like high employment but confidence is a huge issue and only a significant move will restore that confidence and convince lenders and public alike - the Bank of England needs to reduce interest rates and take action fast."