Wednesday, 7 November 2012

House prices plummet 33%

Let's face it: house prices are down by a third.

That's good for first time buyers and people looking to trade up.

Not so good if you're using the housing market as a way to make a profit or as a substitute for a pension scheme.

The Halifax reports that the average house costs £158,426.

At the peak in August 2007, the average was £199,612, so the drop in cash terms is 21%.

But we've had lots of inflation since 2007. So there is a double impact: your house is worth fewer pounds and your pounds are worth less in the shops.

Adjust the 2007 house price for the change in the Retail Prices Index and you'll see that the real drop is even greater.

It's 33%.

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