Heartache for homeowners

Bad news for fans of bricks and mortar - weaknesses in the housing market look to be spreading, and the number of home repossessions has shot up.

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Last Updated: 31 Aug 2010

UK house prices are now lower than they were three months ago, and the weakness shows signs of spreading to London, despite the capital’s previous resiliance. The average house price stands at £229,625, against £230,284 in October.

But we shouldn’t start the panic yet. London, for example, had been performing well, so a blip in the market is not a major issue. And Warren Buffet always argued that a dip in prices was no bad thing anyway. His argument was that it in fact signalled an expanding market, and so beneficial to sellers in the long run. Try telling that to your average young professional couple that just splashed a small fortune on a one-bedroom coal shed in Clapham.

We’d like to see Buffett’s positive spin on the other big housing news. The Council of Mortgage Lenders has revealed that the number of home repossessions has passed 27,000 – a rise of 21% on last year. It’s the highest figure since 1999. The number of mortgages in arrears rose by 8.6% compared to 2006, according to the CML figures. And there’s more pressure to come as a result of the credit crunch, and higher energy and food prices. Suddenly renting a room in a bedsit seems that little bit more appealing.

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