Most recent data announced by a leading player in the House Sales UK market demonstrate that the drop in House prices slowed fairly considerably in October. The rate of fall was 0.4%, as compared to 1.3% for the month of September.
The data were published by the Nationwide Building Society, which is one of the leading players in the House Sales UK market. The Nationwide is one of the very few of the old mutual Building Societies to have managed to maintain its mutual society standing. Indeed it’s the ONLY substantial one to survive the craze for demutualization a decade or so ago. Since then it has steered a very conservative path through the more recent craze for buying into the derivatives and U.S. Sub Prime Mortgage markets. The society doggedly stuck to its core values, and stuck to the old fashioned, and at the time very unfashionable business model, of raising capital by taking deposits from its cash rich customers, and using those funds to lend to its own younger customers who need finance to Buy Houses.
As a result of this very conservative policy, the Building Society’s management now finds itself completely vindicated for not following the herd instinct of the other big financial institutions. It finds itself in an almost embarrassingly popular position with savers, because they in turn recognise the fact that the society’s cautious policies have been vindicated, and they’re therefore very much attracted by society’s continued mutual status, which makes it very much insulated from the vagaries of the world stock markets. All the aforesaid makes the Nationwide a player to watch, listen to & respect, as it becomes an even stronger player in the House Sales UK market.
This slowdown in the rate of fall in House prices can only help to bring more Home Buyers back into the market, and so the rate of fall could be slowed even further over the coming months. Bear in mind that House Buyers aren’t just families looking to Buy Houses to live in. There’s a large and expanding number of families and companies who see Houses as a secure haven for their excess funds. These people and companies have begun to think this way after seeing several famous banks fall. They’ve realised that hefty deposits held by private individuals, and all cash held by limited companies are not protected against Bank failures. Houses, on the other hand, can’t disappear, even if they can lose some of their value over the short to medium terms.