Many people say to me that they keep reading house prices are falling at a record rate, but that their memory of the housing bust in the early 1990s is that it was a lot worse. Are they wrong? Not necessarily. House-price data from the two main lenders, Halifax and Nationwide, suggests a record annual fall, down 14.9% and 14.6% respectively. Other house-price measures, however, continue to point to smaller falls. The government’s measure, from the Department for Communities and Local Government, showed a small fall in September and was down by 5.1% on a year earlier. The FT-Acadametrics index is down by 6.2% over 12 months. Perhaps the best compromise is offered by the “poll of polls” produced by the Centre for Economics and Business Research for Chestertons, the estate agents. It shows an annual fall of 9.5%.

That is still a significant fall, comparable with the early 1990s, but there is an additional dimension. It depends where you live. By late 1990, prices in East Anglia and the southeast were down by 20% on a year earlier, on their way to a drop of 40%. In many northern areas, however, prices did not fall until later, and by much less. This time, prices are falling across all regions.

Where do we go from here? The Royal Institution of Chartered Surveyors was both gloomy and optimistic last week, reporting another new 30-year low for sales, while noting that its members are optimistic about prospects for recovery (of sales, not prices) over the next three months.

Last week, at a Chartered Institute of Housing conference, I shared a platform with David Orr, chief executive of the National Housing Federation, which represents 1,300 housing associations and campaigns for affordable housing.

Orr reminded us that the factors that pushed up prices have not gone away, and that recent falls, because they have been caused by a decline in mortgage availability, have not made housing more accessible for first-time buyers. Research commissioned by the institute suggested that shortages will push prices up by 25% over 2011-13.

Another snippet I picked up at the conference: it is not just price and funding issues that are stopping housing associations buying unsold homes from builders to let to tenants. In many cases, it is because they are not built to the associations’ high specifications.

home.economics@sunday-times.co.uk

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