00:02:17
ITN
House prices drop
House prices drop
House prices have dropped at their fastest rate since July 2005, figures have shown.The Royal Institution of Chartered Surveyors said the cost of homes in October fell for the third month in a row and at its fastest pace since two years ago.But the number of people looking to buy fell for the 11th consecutive month, as a result of higher interest rates, the recent credit crunch and tighter regulations from mortgage lenders.However, the group said a shortage in the number of homes being put up for sale was continuing to help the market.The survey also reported seeing price falls in all regions of England and Wales, except from London, while there were large declines in Northern Ireland and a cooling of price growth in Scotland.Meanwhile, new research has shown it is generally cheaper to buy a property than it is to rent.But the difference between buying and renting has narrowed sharply since 2006 - and in Northern Ireland, Wales and the North West, it is now cheaper to rent than it is to buy.High street bank Abbey said buying a home would be £5,811 or 1.3 per cent cheaper that renting a similar property over a 25 year period.However,the figure has dropped sharply from last year when it was more than £24,000 or 6 per cent cheaper to buy than it was to rent.Nici Audhlam-Gardiner, head of mortgages at Abbey, said: "A number of factors have come together to cause rent over 25 years and a mortgage for the same period to converge across the UK."But while on a month-to-month basis in some areas it is cheaper to rent rather than buy, at the end of the 25 years a homeowner actually has a house whereas a renter has nothing."In addition, homeowners benefit from any further house prices rises as the value of their equity increases over time."So despite the convergence, we believe that people are still better off owning a property."© Independent Television News Limited 2007. All rights reserved.
ITN | November 14, 2007
