House prices continue to plummet
Any homeowner in England and Wales is probably keeping a close eye on what is happening with property prices, as according to industry officials house prices have been tumbling now for around ten consecutive months. According to a recent report released by the Nationwide Building Society house prices fell a further 1.9% in July compared to August, and officials state that this has brought the annual fall into double digits for the first time since 1990.
The report claims that house prices are now 10.5% lower than they were this time last year, which means that the average house price is down by around £19,000 compared to last year. The average house price now stands at £164,654. Furthermore, officials from the Nationwide have said that the outlook will remain bleak for the foreseeable future, with gloomy forecasts from house builders.
House prices are now said to be at the lowest level since 2006, and some estate agents have suggested that the data does provide some degree of hope because some buyers may regain interest in purchasing property as a result of being able to get huge discounts on the price of buying a home. However, a Nationwide economist warned that the number of properties remaining on estate agents’ books would serve to further drive down property prices, at least in the short term.
The report has also indicated that house builders have seen a drop in consumer confidence levels because of the ongoing slowdown. And purchase activity is still low, having been driven down by lack of mortgage availability amongst other factors.
The Nationwide economist said: “There is clearly less mortgage borrowing taking place in the current market, but those borrowers choosing a new loan are tending to opt for fixed rate loans, even though they have been more expensive than trackers.”
Mortgage lending levels are also still very low, and whilst July saw a slight increase in mortgage lending levels compared to June, with a 5% rise in mortgage lending, officials said that the level of mortgage lending was still 27% lower than it was in July of last year. Whilst the falling house prices would normally have been good news for many potential first time buyers, who may have been patiently waiting for years to get onto the property ladder, the problems in getting a mortgage due to the global credit crunch means that many are still coming up against a brick wall when it comes to getting onto the property ladder.
Nationwide has also stated that the market faced a lot of uncertainty at present, and this means that house prices are set to continue falling over the remainder of this year and possibly into next. This will also put many people off from making a purchase due to the risk of quickly falling into negative equity, so the impact on the housing market will also be significant.
Recent Additions:
- BoE states buyers hoping to get 20% off price of a home
- London estate agent closes its doors on sales
- Best buy mortgages still demand higher deposits
- Experts comment on inflation and interest rates
- House prices now more than 10% lower than last year
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