Assetz For Investors News
Fri, 30 May 2008 13:01:24 BST
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Banks\' Profiteering is Lowering House Prices
Stuart Law, Chief Executive of Assetz, responds to the Land Registry House Price Index, released today:
“The marginal 0.2% monthly fall in house prices, reported by the Land Registry today provides a true reflection of the current housing market and is far removed from the spurious 2.5% fall suggested by Nationwide earlier this week.
“The Nationwide figures are skewed, based only upon its own mortgage approval data and as a result, significantly impacted by their recent increase in mortgage rates, while the Land Registry data provides a more reliable overview of the entire market – incorporating a full range of homeowners and including both mortgaged and un-mortgaged homes.
“With this in mind, I expect to see a continuing divergence of both the Nationwide and the Halifax indices, away from that of the Land Registry, as they continue to reflect a limited section of the market – typically ignoring all those who require a limited mortgage or no mortgage at all.”
Law adds:
“It is the banks' profiteering which has led to purchasers trying to chip away at vendors’ asking prices, in order to compensate for the additional borrowing costs they are now having to endure.
“I would strongly urge the banks to stop profiteering and for the Bank of England to reduce interest rates in June to get the market moving. Until the mortgage market returns to normal I would take the lenders house price data with a pinch of salt, as it is becoming less representative of the market as a whole.”
