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Monthly house prices in England and Wales fell by 2 per cent in February, according to the latest figures from Land Registry.

The average house price is now £153,862 which represents an annual decrease of 16.5 per cent. In London the average price has fallen by 15.6 per cent in the last year to now stand at £298,563.

It is the eighteenth month in a row where the annual rate of change has fallen, in contrast to 21 months of uninterrupted increases in the average annual rate of change between December 2005 and August 2007.

The North West was the region with the most significant monthly price fall with a movement of -4.1 per cent.

The most up-to-date figures available show that during December 2008 the number of completed house sales fell by 55 per cent to 36,341 from 81,300 in December 2007. In London 3,957 house sales were completed in December 2008 compared with 9,543 in December 2007, representing a fall of 59 per cent.

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The latest FSA mortgage lending data shows that gross new lending fell by 48% in the year to 2008.

The data for the final quarter of last year, shows that new lending peaked in Q3 2007 at £102 billion before declining to £45 billion in Q4 2008, leaving gross lending 26% lower in the quarter, and 48% lower than a year earlier.

Key statistics are as follows:

• The total value of outstanding loans is £1,200 billion, an increase of 3.5% compared to a year earlier. But quarterly growth continues to slow, with a Q4 2008 increase of just 0.25%.
• Loans to borrowers with an impaired credit history represented just under 1% of new lending in Q4 2008, compared to 3.2% a year earlier.
• While the number of new arrears cases had remained constant at around 54,000 each quarter since early 2007, the latest two quarters have shown sharp increases. Q3 2008 saw an increase of 10% to 60,000 cases, while results for Q4 2008 show an increase of 13% to 68,000 cases.
• With borrowers increasingly struggling to clear their arrears, the total number of loan accounts in arrears has been steadily increasing since early 2007. At the end of Q4 2008 there were 377,000 loan accounts in arrears, an increase of 36,000 or just over 10% since Q3 2008, and an increase of 31% on a year earlier.
• The proportion of the residential loan book that is in arrears, and hence not fully performing, rose to 3.37% at end Q4 2008, up 0.44% in the quarter and up 1.11% on a year earlier.
• The numbers of new possessions has grown significantly since Q3 2007, but the number of new possessions in Q4 2008 at 13,028 was actually 436 fewer than the 13,464 recorded for Q3 2008. New possessions in Q4 2008 were nonetheless 60% higher than a year earlier. For 2008 as a whole, the number of new possessions reached 46,750 which is an increase of 68% on the 27,900 recorded for 2007

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Sellers across all ranges of property are over-optimistic in their asking prices, according to the National Association of Estate Agents’ (NAEA) latest property analysis.

The analysis shows that whilst small, two bedroom homes did actually rise in value between January and February, along with exclusive, top end executive properties, “family” three and four bedroom homes saw their value plummet month on month.

Commenting, Peter Bolton King, chief executive of the NAEA, said: “The NAEA’s property analysis reveals in depth what is happening in the housing market - and show how hard middle class families in three bedroom homes are being hit by the property slump.

“Smaller houses actually saw their value increase - this suggests that people who are buying are picking up smaller houses than they may have done previously, possibly because they can only get smaller mortgages. It may also reflect a trend of downsizing.

“The very top end of the market has also performed well, demonstrating not only that the very rich can still afford a high end property, but that with plummeting interest rates are now perhaps more tempted to put their money into bricks and mortar.

“Sellers are also consistently over-pricing their properties across the market, and inevitably having to accept a cut in price in order to achieve a sale.”

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The cut in interest rates to 0.5% last week is causing controversy and mortgage experts slammed the decision.

Yet for thousands of borrowers with tracker mortgages interest rates have fallen to 0%, with a fall of over 4.5% in the last 6 months

But the decision was seen as futile by some experts. CBI chief economist Ian McCafferty was reported in a Guardian article as commenting: “With interest rates already at historic lows, the conventional rate-cutting tool is becoming less and less effective as a means of stimulating the economy.”

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Homeowners face having to pay hundreds of pounds extra because Home Information Packs could be out of date by the time their properties are sold, MPs say…

The packs, which cost on average £350, were introduced last year by the Government to improve and speed up the process of buying and selling a house.

Yet the near-collapse in house prices means that many of the local authority searches in the packs, costing up to £200, are likely to be out of date by the time they are sold.

This means that some homeowners could have to order more than one search as their home languishes on the market.

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The Bank of England’s Monetary Policy Committee today voted to reduce the official Bank Rate paid on commercial bank reserves by 0.5 percentage points to 0.5%, and to undertake a programme of asset purchases of £75 billion financed by the issuance of central bank reserves.

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Northern Rock repossessions up Northern Rock saw repossessions jump by 63% in 2008, while making a £1.4 billion loss

It held 3,620 repossessed homes at the end of 2008, up from 2,215 a year earlier but lower than the 4,201 it held at 30 September 2008.

The nationalised bank has reduced its government loan, paying off £18 billion of its £26.9 billion loan. It has also confirmed that it will offer £14 billion in lending over the next two years. New mortgage lending at the bank was about £2.9 billion in 2008, compared with £29.5 billion in 2007.