House prices fell by 1.7 per cent in September, meaning that more people may be facing the prospect of negative equity, a new report has shown.
The average value of a home was £161,797 in the ninth month, compared to £164,654 in August, according to building society Nationwide.
Chief economist Fionnuala Earley said that the development was not surprising given the “astonishing” events in the financial sector over the past year.
She remarked: “The higher cost and lower availability of finance resulting from the credit crunch were clearly important factors in triggering the slowdown and bringing us to where we are now.”
Consumer confidence and solutions to current global crises are the biggest factors that will shape the housing market in the coming months, Ms Earley added.
Meanwhile, equity release has been described as a “feasible option” for some pensioners that may be struggling in the wake of the economic slowdown by banking expert David Black from Defaqto.
By Jamie Price