Novahomes pours cold water on the media credit crunch furore

Novahomes Director Mark Savill comments on how, despite media pessimism, there has been a swift house price correction.

2008 must be one of the fastest property market corrections ever, as evidence shows what took 3-4 years in the 90’s has occurred in a record breaking 6 months! Property is appearing on the market at prices akin to those of 2005, and selling to people who perceive it to be recession proof money. In the early 90's the market correction lasted from 1989 to 1993 and over that time the average price fall for the UK was just under 10% and just under 20%1 in the South West.

Why the correction has been so fast is open to debate. In the 90's price falls began in London, gradually spreading across the UK; however in 2008 the whole country has been affected almost simultaneously due to a lack of mortgage funding. The most significant difference is in the recent behaviour of buyers; those who decided to put their move on hold are now seeing some great opportunities to buy due to more attractive pricing.

Is the price correction bad news for sellers? For those who are not buying maybe, for the rest this has to be good news. Affordable housing makes life easier for those wanting to get on the housing ladder, easier and cheaper for those climbing the ladder and means we spend a lower percentage of our income on either rent or mortgage.

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