Findings from a survey conducted by Nationwide have revealed that August 2008 marks the 10th consecutive month that house prices have fallen. When compared with last August house prices are 10.5% less, which has effectively knocked £19,000 off the average house price. As many of us are aware, this has had repercussions for those wanting to sell their homes, as people are being forced to accept lower offers if they are determined to sell and also for those wanting to buy, as although lower prices are good for buyers the difficulty of obtaining a mortgage means that lower prices cannot be capitalised on. However, pressure is mounting on the government to tackle this issue so keep an eye on the news next week as Gordon Brown unveils his plans to help us through these tricky times in the housing market.

For now let’s review the top money stories for the week beginning 25th August 2008.

Wednesday 27th August:

Middle-class families struggling with debt –

A report issued by the credit reference agency Experian has shown that many middle-class families have debts of over £50,000. Experian has also interestingly revealed that there are clear pockets of the UK that are more in debt than others. For example those living in London and the South-East tend to borrow, on average, four times as much as those living in the North-West and Scotland, with the most indebted areas including Richmond, Surrey; Epsom, St Albans; and Wandsworth, London. Middle England has, broadly speaking, been able to borrow heavily and experience good access to credit as the value of their homes were expected to grow. However as house prices have dropped in value, this is no longer the case and many will feel the burden of debt. If you’re feeling swamped by debt it’s important not to keep the problem to yourself, click here for more information and helpful ways of lightening the burden.

Repossessions rise – The homeless charity Shelter has revealed that it is not just homeowners that are at risk of repossession – renters are too. With many consumers struggling to get onto the housing market because of a tightening in the number of new mortgage approvals, many are opting to rent. However, investors who buy-to-let are also struggling to obtain loans, which is illustrated as in the last six months there have been 31,900 fewer loans made to landlords (as noted by the Council of Mortgage Lenders). Although this is another sign of a depressed housing market, as consumers’ demand for renting has increased, this will help buoy the rental market. Adam Sampson, chief executive of Shelter, is keen to point out that "the impact of repossession can be even greater for tenants who, despite paying rent on time, can find themselves with very few rights and the first they even know about it is when the bailiffs start banging on the door."This may sound scary but there are ways renters can protect themselves from repossession and maintaining good relations with your landlord is vital to keeping on top of your housing situation.

Friday 29th August:

Rising energy prices –Today the two energy companies that had resisted raising prices succumbed to the increasing price of wholesale gas and raised energy prices, increasing their gas prices by, on average, 34% and 26% respectively. This move has meant that the big six energy suppliers in the UK have all now raised prices which are likely to hit the consumer hard as we head into winter. Following this move Energywatch urged Gordon Brown to propose an action plan to provide “real support to consumers struggling to pay energy bills that have gone up by almost 40% this year alone.” It will be interesting to see the plans proposed by the government and the energy companies as they seek to help vulnerable consumers this winter. Alongside waiting to see what the government and energy companies are doing, it’s a good idea to review your own budget and see if there are any areas of unnecessary spending where you can scale back, in order to keep on top of your energy bills. Visit Moneybasics’ Tips to Reduce Spending for useful tips on how to save money.

Prepared for Moneybasics by Joanna Parsley, Advocacy Officer (Credit Action).