U.K. Home Prices Drop as Economy Nears `Abyss,’ Rightmove Says

Source: Bloomberg.com

U.K. house prices posted the biggest annual decline in at least six years in October as the British economy stared “into the abyss,” Rightmove Plc said.

The average asking price for a home fell 4.9 percent from a year earlier, the most since records began in 2002, to 229,691 pounds ($398,000), Britain’s most-used property Web site said today. In London, prices dropped 2 percent from a year ago.

“Certainly from an economic point of view, we’ve stared into the abyss,” Miles Shipside, commercial director at Rightmove, said in a Bloomberg Television interview. “With unemployment growing, we can see a lot of repossessions about to happen. The situation is going to get more severe.”

Britain is in a recession and will contract for the next three quarters, according to a report published today by Ernst & Young’s ITEM Club, which uses the same forecasting model as the U.K. Treasury. The financial crisis forced the government to rescue banks and has left a dearth of loans for potential homebuyers.

Full Story: Bloomberg.com

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