Lib Dems call for support for homeowners to stop correction becoming a crash
May 29, 2008 4:00 PM
Lib Dem Shadow Chancellor Vince Cable has called for protection for homeowners as the latest figures from the Nationwide show house prices slid 2.5% in May. This drop is the biggest monthly fall ever recorded by the building society, and the seventh successive month of falls. The annual rate of decline is the biggest since December 1992 when house prices were falling at an annual rate of 6.3%.
The typical house lost almost £5,000 in value, to £173,583, over the month, leaving average prices 4.4% lower than a year ago.
Commenting, Liberal Democrat Shadow Chancellor, Vince Cable said:
"This free fall in house prices is becoming worryingly reminiscent of the Tory recession of the 1990s.
"The reality is that the housing market has been seriously overvalued for some time thanks to massive consumer debt. Even the Government now admits we will see a large correction over the next one or two years.
"With falling house prices and high mortgage costs there is a real danger that many people could find themselves in negative equity and under serious threat of repossession.
"It is essential that we protect families in danger of losing their homes, ensuring repossession is only ever an extreme last resort. Otherwise the housing market may well suffer the same massive crash that we saw under the last Conservative Government."
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