House prices are falling at the fastest rate since the Great Depression, with the number of home owners in negative equity trebling in the past month alone.
Figures released by Halifax, the country’s largest mortgage lender, showed that the average house had fallen in value by 12.7% since August last year, leaving the average price at £174,178.
This represented a fall of more than £25,000 and was the fastest rate of decline since Halifax started collecting monthly data in 1983.
However, City economists said the housing market had never witnessed an annual fall of more than 10% except for in 1931 — the year Britain was hit by the aftermath of the Wall Street Crash and sterling collapsed. David Owen, the chief European economist at Dresdner Kleinwort, the investment bank, said: “It is a major collapse.”
He added that the price fall was unprecedented in living memory.