House prices fell more steeply last month than at the worst point of the 1992 housing market crash, latest figures from Halifax Bank of Scotland revealed yesterday.
House prices fell more steeply last month than at the worst point of the 1992 housing market crash, latest figures from Halifax Bank of Scotland revealed yesterday.
The UK's biggest mortgage lender reported that prices fell 2% in June, effectively knocking £20,000 off the value of the average home since last year's peak.
The fall of 8.7% from June 2007 has taken the average UK house price to £180,334, prompting warnings that Britain is suffering the worst housing slide in 50 years.
HBoS has not yet released the latest figures specifically for Scotland, which has not been hit by the same fallout because it did not experience the same level of soaring prices that took hold south of the border.
Despite earlier optimism, Scottish estate agents warned yesterday that Scotland could no longer expect to stay ahead of the rest of the UK as desperate sellers continued dropping prices to shift property.
The prediction follows signs earlier this week that Scotland's traditionally better position in the UK housing market was being increasingly threatened by the credit crunch.
James Whitson, director at Scottish estate agents Rettie and Co, said: "It's a buyers' market. Supply is on the ceiling and demand is on the floor. The only way people who want to sell will be able to do so will be by reducing their prices. We are already seeing prices reducing every day. A year ago a house worth £1m might fetch £1.2m, now it will get £1m and not a penny more - it may get less."
He agreed with analysts' warnings that the whole of the UK was experiencing a housing slump worse than the last one in the 1990s. He said: "The difference between then and now is that in 1991 people could still get money, it cost them but they could get it. Now the chain scenario has come in because people can't get the funding that they want."
Yesterday's figures came as the Bank of England kept interest rates on hold at 5%, demonstrating the bank's continuing wariness about fuelling inflation with a further rate cut. Earlier this month, economists in Scotland predicted that the economy north of the border would be more resilient than the rest of the UK as the global financial crisis hits harder.
Recent signs that Scotland's economy was bucking the UK trend included Nationwide building society figures revealing that Scotland was the only one of 13 UK regions where average house prices rose in the 12 months to mid-June.
