Rent Guarantee UK – Rent Guarantee UK | UK property market slide continues with four of last five months showing house price falls
UK property market slide continues with four of last five months showing house price falls
The slide in the UK property market continued in April, figures showed today, with a 0.2 per cent fall making it four months out of five that house prices have dropped.
And Nationwide warned that house prices, which on average were also 0.9 per cent down on April last year, were set to stagnate or fall throughout 2012 as households’ confidence lagged behind any possible economic recovery.
The building society said the April fall, which followed a steeper 1 per cent monthly fall in March, leaves the average UK property price at £164,134.
The Nationwide data continues a run of bad news for British homeowners: earlier in the week, official Land Registry data also showed house prices had dropped in March.
On the borrowing front, more than a million homeowners saw the cost of their repayments go up this week as lenders pushed up their rates, blaming the weak economy and the increased cost of funding a mortgage.
Figures yesterday from the Bank of England suggested that the brief rise in mortgage lending at the start of the year had now come to an end.
Availability is expected to decrease in the coming months as lenders tighten their borrowing criteria, something which has already triggered a fall in the proportion of mortgages being approved by lenders.
And the Co-operative Bank yesterday became the first to ditch interest-only mortgages, in a further signal that buyers face less choice in the mortgage market this year.
Nationwide said much of the recent ‘softness’ in the market is due to the ending of a stamp duty concession for first-time buyers.
It said a rush of buyers to complete deals before the concession ended in March had the effect of bunching up sales which would have otherwise taken place later this year.
Around four in 10 first-time buyers have benefited from the concession during the two-year period it was in place, according to recent research.
Robert Gardner, chief economist for Nationwide, said: ‘Much of the recent softness in measures of housing market activity and house prices is likely to relate to the expiry of the stamp duty holiday in late March.
This provided a temporary boost to house prices in early 2012 as buyers brought forward purchases that would otherwise have taken place later in the year.’
He suggested that the effects of this will fade in the coming months, but warned that the ‘challenging’ economic backdrop means that significant price rises are unlikely in the near future.
The report said the recent return to a recession is likely to undermine ‘fragile’ confidence even further and discourage consumer spending.
Although the UK economy is set to pick up during the second half of this year, it will be some time before the ‘feelgood’ factor filters through to squeezed households, the study warned.
The report said: ‘Housing market activity is also likely to remain subdued, with prices showing little growth or moving modestly lower over the next 12 months.
Source: http://www.thisismoney.co.uk/money/mortgageshome/article-2138804/Nationwide-says-UK-house-prices-fall-months.html