It’s the first working day of the New Year and already there is some gloomy economic news to impart. I fear that it rather sets the scene for 2009.

There are two sets of figures relating to the housing market which have been released this morning:

  • House prices fell by 16.2% during 2008 – the biggest drop for a calendar year on record, according to the Halifax.
  • Bank of England data shows that the number of mortgages approved for house purchase dropped to an all-time
    low during November.

Shadow chancellor George Osborne has reacted by saying that this is proof that the Government’s policies to deal with the recession are not working:

"First we discovered that there were fewer shoppers in December despite the VAT cut, now we discover house prices are falling sharply and mortgage approvals at a record low despite the stamp duty holiday introduced three months ago.

"The new year shows that Gordon Brown’s policies are not working and the recession is getting worse not better. That is because an economic recovery depends on confidence in the future, and people do not have that confidence while we have a Labour Government in power bankrupting the country."

Jonathan Isaby