Property slump gathers pace

House prices in the UK plunged 15 per cent in the year to October, Halifax said yesterday, as tighter lending continued to deter first-time buyers. Britain’s biggest lender said prices fell 2.2 per cent last month and warned conditions ‘remain challenging’. Would-be buyers welcomed yesterday’s decision by the Bank of England to cut its base rate from 4.5 per cent to 3 per cent. However, analysts believe this will not help first-time buyers, which means prices are likely to fall further. Many economists believe it will take at least a decade for prices to regain record 2007 levels with Andrew Clare, professor of asset management at Cass business school, saying it would take until 2023. The average price of a property in Britain is now 168,176, a fall of almost 4,000 since September and about 30,000 less than in October last year. The annual drop is the sharpest since the index began in 1983 and means that, in the past year, prices have fallen faster than at any point during the crash of the early 1990s.