Halifax home price data released today shows that home prices in the UK have fallen 7.76% since their peak in August last year. The average home ‘lost’ £15,500 in potential sale value over this period.

Levels of borrowing in what some describe as the biggest asset price bubble in UK history reached over 5x the average salary with people on lower incomes borrowing even more. Now the credit crunch causing banks to reign in their lending in no small way, preventing excessive borrowing. The knock-on effect is a collapse in the house price bubble as sellers are forced to reduce their asking price to meet the limitations of mortgage offerings.

Halifax data[MS Word Doc]

Nationwide have just released their latest figures[PDF] which show that homes on which they are lending fell at -2.5% month on month between April and May which translates now to a hefty -4.4% fall year on year.

The credit crunch is largely being blamed along with high inflation forcing the Bank of England MCP to hold or possibly increase interest rates in future.

Effectively, of the relatively small number of houses now selling, the average price at sale is dropping £165 every 24 hours as compared to £45 every 24 hours last month*

*The way this is being worked out is a bit spurious but it was a commonly touted figure when the market was climbing at ludicrous speed.

This video from CNN details the life of a working, middle-class woman in Santa Barbara, USA who has been forced to live in her Car.

67 year old Barbara lost her well-paid fulltime former job as a mortgage notary due to the credit crunch and now works part-time for the equivalent of about £4/hour.

Unable to afford the high rent on Santa-Barbara condos and with no immediate social housing available, she now has to sleep in her SUV with her two golden retrievers.

Barbara is not alone in her predicament and Santa Barbara authorities now allow people to park their cars in designated municipal car-parks and sleep in them for the night. No other facilities are available at the car parks.

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.