Lloyds TSB Chief Economist: Housing market firmer than we are led to believe

Lloyds TSB (LON:LLOY) chief Economist, Trevor Williams makes reference to the official house price figures that will be released on Tuesday, saying that the house price decline may not be as bad as we are led to believe.

With both Nationwide and Halifax reporting house prices falling around 12.4 percent in the year leading up to September, Government figures suggested that the price decline is not as bad, stating the national house price has fallen 5.1 percent, showing us that both Nationwide and Halifax are way out with their figures.

We all know that house prices have declined but it’s the government figures we should all be taking note of as the figures measure the final sale price whereas Nationwide and Halifax figures are based on mortgage approvals.

Trevor Williams suggests that guzumping may be in action, whereas the seller accepts a lower offer, the mortgage is then approved on that offer, then the initial offer is declined or never activated. It’s also worth noting that one in five mortgage approvals never get to final completion stage.

In October Nationwide reported that the average national house price was £158,872 with Halifax just slightly above at £167,934, however the government have put the National average house price at £208,583.

Source: thisismoney