Wild Crazy Home Value Drops Slowing Down
Most recent data announced by a major player in the House Sales UK market confirm that the reduction in House values slowed fairly significantly in October. The rate of fall was 0.4%, as opposed to 1.3% for the month of September.
The data were set out by the Nationwide Building Society, which is one of the major players in the House Sales UK market. The Nationwide is one of the very few of the old mutual Building Societies to have succeeded in maintaining its mutual society status. In reality it’s the ONLY sizeable one to survive the rush for demutualization a decade or so ago. Since then it has navigated a very conservative path through the more recent rush for buying into the derivatives and U.S. Sub Prime Mortgage markets. The society steadfastly stuck to its core values, and stuck to the old fashioned, and at the time very unfashionable business model, of raising cash by taking deposits from its cash rich clients, and using those funds to lend to its own younger customers who need funding to Buy Houses.
As a result of this very conservative strategy, the Building Society’s management now finds itself completely justified for not following the herd instinct of the other big financial institutions. It finds itself in an almost embarrassingly popular position with depositors, 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 global stock markets. All the above makes the Nationwide a player to watch, listen to & respect, as it becomes an even more dominant player in the House Sales UK market.
This slowdown in the rate of fall in House values can only help to attract more Home Buyers back into the market, and so the rate of fall could be slowed even further over the coming months. Keep in mind that House Buyers aren’t just families looking to Buy Houses to live in. There’s a large and growing number of people and companies who see Properties as a safe home for their excess funds. These people and companies have begun to think this way after seeing several famous banks crash. They’ve realised that sizeable deposits held by private individuals, and all monies held by limited companies are not protected against Bank collapses. Properties, on the other hand, can’t disappear, even if they can lose part of their value over the short to medium terms.
Posted by Carlos Sagastume on November 30, 2008. Filed under HUD Homes.
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