According to a report by Nationwide Building Society, home prices in the UK have now been falling for six consecutive months and are now also year-on-year negative by 1.1%

During 2008, the price of the average home has been falling by nearly £45 every 24 hours.

Chief economist for Nationwide, Fionnuala Earler comments:

“The latest fall in house prices follows from the steep decline in house purchase transactions over the last half
year. As a result of falling demand from first-time buyers, higher mortgage rates and tighter lending criteria, the
number of mortgages approved for house purchases has fallen to record lows. The fall in transactions has pushed
up the stock of unsold property on the market and improved the bargaining power of buyers, thus pushing down
on prices.”

The last 10 years has seen an alarming asset bubble develop in the UK, a similar if not worse situation as to that which happened in America.

Via Documentally, here we have Martin Summers talking on the coming economic collapse sparked by the UK and the world’s debt mountain, war, poverty etc. He thinks it’s looking like the 1930s again, maybe even the 1940s.

Martin Summers, the Former East European projects officer for the New Economics Foundation talks about present day money matters as we slide down a slippery sope.

I read this article in utter disbelief that the West Northampton Development Corporation wants to tax new home buyers to the tune of £20,000.

The proposal is being billed as a tax on ‘developers’ but only an idiot would fail to see that developers will simply push the £20,000 tax straight on to the buyer.

I suggest all sane homebuyers cross the West Northampton areas off their lists of places to buy a home.

The Halifax has posted a report of 2.5% house price falls month on month, the sharpest drop since the early 90s. The year on year figure is still positive at 1.1%

Martin Ellis, chief economist for Halifax said:

Overall, we expect there to be a modest fall in UK house prices this year. Any declines, however, should
be viewed in the context of the significant price rises over recent years. The average UK price has risen
by £120,860 during the past decade from £70,696 to £191,556; an increase of 171%.

Predictably there were some calls for the Bank of England to reduce interest rates but obviously, it is not the BoE’s remit to look after asset prices, rather to target inflation. Furthermore, the Bank of England’s previous interest rate cuts have not been passed on to mortgage borrowers, the private banks have instead been increasing their rates to customers.

Any such downward move in interest rates in the face of massive inflation would destroy the pound’s value against the Euro just in time for British people’s summer holidays.

The Abbey National bank deleted it’s 100% mortgage product today, the last such 100% product available in the UK.

According to Bloomberg, Northern Rock is to pull out of the UK subprime mortgage market.

The recently nationalised bank has been reducing it’s mortgage offerings over recent weeks.

This will no doubt come as something of a shock to the UK government who have been adamant thus far that there is no subprime crisis in the UK and that it’s all an American problem

The UK just bought itself a bank.

For a cool estimated £55-£100 billion of the taxpayer’s money, the UK government is to nationalise failing UK bank Northern Rock.

Northern Rock got into severe trouble late last year and had to borrow colossal ammounts of money from an emergency facility at the Bank of England. This in turn caused a failure of confidence in the bank by it’s depositors and a bank run.

The UK Labour government has now apparently decided that the taxpayer’s exposure to Northern Rock is so massive that they have no choice but to nationalise the bank in order to attempt to get back some of the money they have taken.

There had been various private takeover offers for the bank including one lead by Richard Branson’s Virgin group but they failed to materialise. It appears that the already hired former boss of Lloyd’s of London will be installed at Northern Rock to take control.

Whether there is any salvage to be had and whether the taxpayer will lose their money remains to be seen.

One would imagine that the UK chancellor, Darling, will now be about as popular with the British taxpayers as flatus in an elevator.

Update: Full details of the assets and shares nationalisation is to follow tomorrow (18th Feb)

Photo Credit: Alex Gunningham cc-by-2.0