Lib Dem Cable speaks on reasons for record slump

Posted: 05 Jan 2009 12:38:31 GMT

Liberal Democrat treasury spokesman Vince Cable has attributed a mix of buyer confidence concerns and the collapse of the mortgage lending industry to the record house price falls included in a recently published Halifax report.

The report shows property making a fall of 16 per cent last year - with prices dropping 2.2 per cent in December alone - representing the sharpest falls in the value of property since the mortgage lender started its records.

Mr Cable explained that there are two factors affecting the current marketplace and suppressing prices, hinting that there will be little the government can do to rectify the situation.

"It is understandable that when house prices are falling and are expected to continue to fall for some time that borrowers will hold back rather than risk finding themselves in negative equity," he said.

"Nonetheless it does appear that the inevitable big correction in the housing market is being exaggerated by the complete collapse of mortgage lending by the banks. The government is completely paralysed at this crucial moment."

Homeowners hoping to get a good price for their property could benefit from selling their property online, as more buyers could view the property.

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