Housing market

House prices suffer biggest fall since records began

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House prices: Dropped by more than £25,000 over the past year. Photo: Cate Gillon/Getty

House prices fell by 1.8% in August, bringing the average price of a property in the UK below the government’s new stamp duty threshold, figures showed today.

The UK’s largest lender, Halifax, said the average price of a property had fallen by 12.7% since last August – the biggest fall since it began publishing a monthly survey in the early 1980s.

Prices have dropped by more than £25,000 since August 2007 when the average cost of a home was £199,612, and by more than £3,000 since July.

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Fed: Severe Downturn Possible

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WASHINGTON (Reuters) – Members of the Federal Reserve’s policy-setting committee worried at their most recent meeting that housing and financial market stress could trigger a nasty slide in the economy, even as inflation pushed higher, minutes of the meeting released on Tuesday show.

“Some believed that a prolonged and severe economic downturn could not be ruled out given the further restriction of credit availability and ongoing weakness in the housing market,” minutes of the March 18 meeting said.

Fed economists presented a somber picture of short-term prospects — central bank staff now fully expect negative growth over the first six months of the year — but held out the possibility of a modest rebound later.

“The staff projection showed a contraction of real GDP in the first half of 2008 followed by a slow rise in the second half,” the report said, referring to gross domestic product, a broad measure of a country’s output of goods and services.

At the same time, Fed officials found recent inflation reports “disappointing,” noting also with concern that some indicators of inflation expectations were edging higher.

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